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November 4, 2019

U.S. Commerce Department Watchdog Challenges Section 232 Exemption Process

As CNN International reported last week, the U.S. Department of Commerce’s inspector general (or IG, the agency’s internal watchdog) has raised questions about the Trump administration’s exemption process for its Section 232 steel and aluminum tariffs. In a memo, the IG said it had found that an “unofficial” appeals process exists that is neither “transparent nor objective.”

The IG investigation also found that, of the more than 100 meetings and telephone conversations between department officials and interested parties “none had an official record of the subjects discussed during the meeting.”

The memo concluded these concerns give “the appearance that department officials may not be impartial or transparent and are potentially making decisions based on evidence not contained in the official record for specific exclusion requests.”

The Commerce Department so far has processed more than 80,000 requests for exemption from the Section 232 metals penalties. About three-fourths have been approved.

In a statement, the Department of Commerce said it “takes this alert seriously and looks forward to working with the Office of Inspector General to gain additional information about the underpinnings of their findings.” The agency also outlined steps it had taken to safeguard the process.

The report came at a time when lawmakers on Capitol Hill also are wary of the process, and the Section 232 authority in general. A bipartisan group of lawmakers continue to say they are interested in passing legislation to provide additional oversight of the Section 232 exemption process, and to rein in the president’s Section 232 powers. It is unclear at this time how much support either of those measures would have.

Also last week, U.S. senators passed a package of spending bills that included an amendment that could force the Trump administration to publicly release the report from its Section 232 investigation that established imported autos as a national security threat.

Visit MSCI’s advocacy page to review its stance of the Section 232 aluminum tariffs and on the Section 232 steel tariffs. MSCI also summarized its views in a September 2017 letter to President Donald Trump.