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June 26, 2018

U.S. Commerce Department Announces First Section 232 Product Exemptions

As Connecting the Dots reported last week, the Metals Service Center Institute (MSCI) wrote to Canadian Prime Minister Justin Trudeau asking him to halt retaliatory tariffs on steel and aluminum products. American Metal Market (AMM, subscription required)reported on that letter and MSCI received word that the correspondence had been directed to Canadian Minister of Foreign Affairs Chrystai Freeland and would be carefully reviewed. As MSCI members are aware, the government of Canada has stated its commitment to “stand up for Canadian steel and aluminum workers and businesses, and is committed to defending our primary interests and values so that Canadian industries and businesses can continue to drive economic growth and create middle class jobs.”

Meanwhile, last Wednesday, the U.S. Commerce Department announced that it has approved 42 exemption requests from the Section 232 steel and aluminum tariffs for seven companies that import steel products from Japan, Sweden, Belgium, Germany, and China. The department also denied 56 separate steel exclusion requests from 11 companies. (The full list of companies is available here.)

In its statement, the Commerce Department noted, “Exclusions generally are granted if there is no domestic availability and there are no overriding national security concerns with regard to the specific product.”

The department also said it will post decisions on steel and aluminum exclusion requests on an ongoing basis. Granted and denied exclusion requests can be viewed at www.regulations.gov under steel docket number BIS-2018-0006 and aluminum docket number BIS-2018-0002.

The process for exclusions is moving very slow. On Capitol Hill last week, U.S. Commerce Secretary Wilbur Ross acknowledged his department got many more requests than it expected to receive and, as a result, is currently sitting on a sizable backlog. As a reminder, the process for requesting a product exclusion is as follows:

  • All exclusion requests must be submitted through regulations.gov. The steel docket number is BIS-2018-0006. The aluminum docket number is BIS-2018-0002.
  • 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.
  • 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 regulations.gov.
  • Approved exclusions are made only for the product requested imported by the individual or organization 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.