Trade Updates

We’re more than just brokers – we’re knowledge leaders. Stay compliant with Customs, and save on your bottom line with recent updates here.

Commerce Seeking Feedback on Steel/Aluminum Tariff Exclusion Process

Posted May 29, 2020


The U.S. Department of Commerce this week announced that it is currently seeking public comment on the following aspects of the administration’s Section 232 exclusion process: 

  • the appropriateness of the information being collected by the department’s Bureau of Industry and Security in connection with the criteria set out for Section 232 product exclusion requests; and
  • the efficiency and transparency of the product exclusion process itself.

Negative Comments about Steel Tariff Exclusion Process

Background


The request for comment relates to the national security investigation initiated by President Donald Trump in 2018 when he declared to industry executives his intention to impose a 25% tariff on steel and a 10% tariff on aluminum imports.

Two Presidential Proclamations issued the following week, on March 9, 2018, under the provisions of an obscure Cold War-era trade bill (Section 232 of the Trade Expansion Act of 1962, which authorizes the president to enact trade restrictions if the imports threaten national security), implemented tariffs on certain imported steel and aluminum products.

Subsequently, not long after Trump blithely asserted in response to the angry backlash from U.S. manufacturers and others to his safeguards against foreign-made steel and aluminum, that “trade wars are good and easy to win,” Commerce published the requirements and procedures for requesting product-based exclusions from these tariffs.

A Troubled History


Commerce states that as of March 2020, it had received 179,128 exclusion requests (157,983 for steel and 21,145 for aluminum). Of these requests, 34,970 or about one-fifth, have been rejected following 33,297 objections from domestic producers. BIS says it has posted 114,009 decisions, with 78,569 exclusions granted and 25,440 exclusion requests denied.

Frequently described by applicants as “a bureaucratic nightmare” the exclusion process has been plagued by problems from the outset when Commerce was overwhelmed by the deluge of requests that initially came flooding into the department. Lawmakers in Congress and increasingly frustrated industry groups have since made numerous complaints (here and here) about the way in which exclusions have been considered and the lack of any meaningful transparency involved (e.g., the inability to dispute last-minute objections from domestic producers).

In this regard, the department’s Inspector General last October felt compelled to issue a “management alert” to Commerce Secretary Wilbur Ross over concerns about the “lack of transparency that contributes to the appearance of improper influence in decision-making” for the Section 232 steel and aluminum tariff exclusion process

Scope of Feedback


Commerce is now seeking public input on the Section 232 exclusion process and is interested in comments regarding:

  • the information sought on the exclusion request, objection, rebuttal and surrebuttal forms; (2) expanding or restricting eligibility requirements for requestors and objectors;
  • the Section 232 Exclusions Portal;
  • the requirements set forth in Federal Register notices, 83 FR 12106, 83 FR 46026, and 84 FR 26751;
  • the factors considered in rendering decisions on exclusion requests;
  • the information published with the decisions;
  • the BIS website guidance and training videos;
  • the definition of “product” determining when separate exclusion requests must be submitted; and;
  • the incorporation of steel and aluminum derivative products into the product exclusion process. BIS will also accept comments on potential revisions to the exclusion process and any specific details about commenters’ experiences with the exclusion/objection process.

Additional topics that may also be addressed by those making comments are detailed in the Federal Register notice here

Need More Information?


If you have any questions about navigating the exclusion request process or require any technical assistance with the preparation of comments in this regard, don’t hesitate to contact one of our helpful trade experts.

Sign Up for Trade News, Compliance Updates and More