September 21, 2020

U.S. Government Accountability Office Criticizes Section 232 Exclusion Process

PLEASE NOTE: Connecting the Dots is reporting the following information for members’ information only. The Metals Service Center Institute has not taken a position on the following matter.

On Thursday, September 15, the U.S. Government Accountability Office (GAO) released a report examining the U.S. Department of Commerce’s (DOC) exclusion process for President Donald Trump’s Section 232 steel and aluminum tariffs.

Using records from the DOC’s Bureau of Industry and Security and International Trade Administration records from March 2018 to November 2019, the report assessed:

  • The process DOC uses to decide exclusion requests and to what degree it has accepted submitted requests;
  • What criteria and factors affected DOC’s decisions;
  • How often DOC’s met established guidelines for the timely resolution of requests; and
  • The extent to which DOC reviewed the impacts of the tariffs on steel and aluminum imports, as directed.

In short, the GAO found the exclusion process was time-consuming and confusing. It recommended that the DOC:

  • Identify, analyze, and respond to factors in the process that may cause submission errors;
  • Take steps to improve timeliness of exclusion request decisions and address the backlog; and
  • Assign responsibility for reviewing the tariffs’ impact and document the results.

Rep. Jackie Walorski, a strong opponent of the exclusion system, praised the GAO report. She said, “The GAO report further confirms what anyone involved in the Section 232 tariff exclusion process already knows: it has been inefficient, inconsistent, opaque, and unfair.”

She also noted the DOC:

  • Failed to meet its own deadlines 79 percent of the time, including for 96 percent of requests with objections;
  • Reached decisions without verifying claims made by requesters and objectors alike;
  • Denied thousands of requests without further explanation, even though domestic producers cited production and delivery timelines that did not meet the department’s own standards; and
  • Has not fulfilled promises to lawmakers to regularly review the impact of steel and aluminum tariffs on American manufacturers, suppliers, and the economy as a whole.

Connecting the Dots will continue to monitor this issue.