January 11, 2021

REMINDER: A Month Left To Comment On Section 232 Exclusion Process Changes

As Connecting the Dots reported last month, on December 14, 2020, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published a notice announcing changes to the process for seeking exclusions from the Section 232 25 percent tariffs on steel imports and the 10 percent tariffs on aluminum imports.

The changes included:

  • Implementing “General Approved Exclusions” (GAEs), which the DOC estimates will lead to an immediate decrease of approximately 5,000 exclusion requests annually;
  • Establishing new certification requirements for requestors with respect to the volume of product identified in their exclusion request; and
  • Providing clarifications on objector standards for delivery.

The latter two changes of took effect on December 14, 2020 while the GAEs, which can be used by any importer to avoid payment of the tariffs without making an exclusion request and which apply to imports of 15 aluminum products and 108 steel products, were implemented on December 29, 2020.

According to FastmarketsAMM (subscription required), the American Iron and Steel Institute, the Steel Manufacturers Association, the Specialty Steel Industry of North America, and the Committee on Pipe and Tube Imports 232 Coalition sent a joint letter to the Department of Commerce opposing the GAE system. Additionally, in an interview, Steel Manufacturers Association President Philip K Bell argued the changes “could lead to unintended consequences and result in a surge of imported steel being excluded from the [Section] 232 program.”

As a reminder, the public has until February 12 to submit comments on the new process. Click here for more information for how to do so.

As the law firm Arent Fox reminded interested parties, President-elect Joe Biden has said he will conduct a review of the Section 232 tariffs. The law firm also said, however, that “given the administration’s focus on American workers and reshoring, it is likely the tariffs will remain in effect in some form, but with modifications to reduce the adverse impact on U.S. downstream manufacturing competitiveness and to repair some key trading relationships.”

The Metals Service Center Institute consistently has argued that global overcapacity and other unfair trading practices, particularly by China, have harmed the U.S. steel and aluminum markets. To address this circumvention, MSCI advised federal officials to provide relief for producers up and down the supply chain and to consider consequences of any new trade policy, including: the economic impact of global overcapacity on the entire domestic metals supply chain; transition times and implementation rules to any new policy; availability of domestic metals to meet U.S. national security needs, as well as general industrial and consumer demand; and trade flows under current free trade agreements, including NAFTA.

MSCI also asked that Canada and Mexico be excluded from any trade penalties resulting from the 232 investigation on steel.

Click here to review all of MSCI’s advocacy on Section 232 tariffs.