March 26, 2018 | by    

33 Countries Exempt From Steel, Aluminum Tariffs; More Information On Product Exclusion Process

Before the Trump administration’s 25 percent tariff on steel imported into the United States and 10 percent tariff on aluminum imported into the United States went into effect last Friday, the White House announced that imports from Argentina, Brazil, South Korea, and the 28 member states of the European Union would be temporarily excluded from the penalties. (Click here to read the order exempting countries from the steel tariffs and here (for the aluminum order.)

The temporary exclusions will last until May 1, 2018. According to the U.S. Chamber of Commerce, in place of the tariffs, however, it appears these countries will be subject to a de facto quota roughly equivalent to their 2017 volume of imports. Specifically, last Friday’s orders say the president could consider quotas “to prevent transshipment, excess production, or other actions” if “imports from countries exempt from the tariff imposed in Proclamation 9705 do not undermine the national security objectives of such tariff.”

Over the weekend, South Korea then won a permanent exemption from the steel tariffs “as long as it agrees to cap its exports to the U.S. at 70 percent of the average export volume between 2015 and 2017.”

After the most recent announcements, the Business Roundtable estimated that approximately two-thirds of the steel and more than half of the aluminum imported in the United States is now exempt from the Section 232 penalties.

As Connecting the Dots reported last week, the U.S. Department of Commerce has outlined the process by which companies can request that certain products be excluded from the tariffs. The press release accompanying that announcement is available here.. The process for requesting an exclusion is as follows:

  • All exclusion requests must be submitted through www.regulations.gov. The steel docket number is BIS-2018-0006. The aluminum docket number is BIS-2018-0002.
  • Exclusion request forms for steel are here; requests for aluminum are here. 
  • Only individuals or organizations using the steel or aluminum articles in business activities in the United States may submit exclusion requests. Requestors must have an Employer Identification Number or a Customs and Border Protection Import Number.
  • Any individual or enterprise in the United States may file an objection to exclusion requests. Steel objection forms are here; aluminum forms are here.
  • A separate exclusion request “must be submitted on each distinct type and dimension” of the steel or aluminum product to be imported. Separate exclusion requests are required for products “with chemistry by percentage breakdown by weight, metallurgical properties, surface quality (e.g., galvanized, coated, etc.), and distinct critical dimensions (e.g., 0.25-inch rebar, 0.5-inch rebar; 0.5-inch sheet, or 0.75 sheet) covered by a common HTSUS subheading.” Separate exclusion requests are required for aluminum products “with distinct critical dimensions (e.g., 10 mm diameter bar, 15 mm bar, or 20 mm bar) covered by a common HTSUS statistical reporting number.” For both steel and aluminum, separate exclusion requests must also be submitted for products falling in more than one 10-digit HTSUS statistical reporting number.
  • There is no time limit for exclusion requests, but objections to exclusion requests must be submitted 30 days after the exclusion requests are posted on www.regulations.gov.
  • Approved exclusions are made only for the product requested imported by the individual or organization requesting making the request, unless the Commerce Department approves a broader exclusion. Subsequent requests by other individuals or enterprises may be made for the same product type through new supplements. As Politico’s “Morning Trade” explains, this means “a product excluded for one company is not excluded for another unless the second company has also requested and received an exclusion.”
  • The Commerce will review any exclusion request, even if a request for the same product was previously denied.
  • Companies with business confidential Information should indicate on the form that they have such information.
  • Review of exclusion requests will generally take place within 90 days.
  • Exclusions will generally be approved for only one year.

The department also has published special information regarding exemptions from the steel tariffs—those instructions are available here—and for the aluminum tariffs. (The aluminum instructions are at this link.)

In a hearing on Capitol Hill last week, U.S. Commerce Secretary Wilbur Ross promised that any products that are excluded would be protected retroactively. (The Commerce Department initially said there would be no retroactivity.) Ross said the agency already had “made a formal request to the Customs and Border Patrol” to establish escrow accounts. Secretary Ross explained that practice is “quite commonplace between us and the Customs and Border Patrol in the context of anti-dumping and countervailing duties.”

The next day, the White House affirmed the retroactivity policy, explaining the product exemptions “shall be retroactive to the date the request for exclusion was posted for public comment." Again, this differs from the forms originally posted by the Commerce Department that had indicated tariff relief would be effective five business days after the approval is posted on www.regulations.gov.