May 14, 2018

U.S. Lawmakers: Section 232 Exclusion Moving Too Slowly, Must Help Small Businesses, Downstream Companies

Last week, a bipartisan group of 39 members of the U.S. House of Representatives wrote a letter to Commerce Secretary Wilbur Ross arguing the Section 232 exclusion process is too slow and cumbersome. The lawmakers outlined 10 specific requests to help improve the process. In particular, these requests aim to help small, downstream manufacturers.

The requests are:

  • Provide relief to those experiencing undue delays by extending relief retroactive to the date of submission if the application was considered complete on the date of submission, or to the date when requested information that rendered the application complete was submitted if the Commerce Department had notified the applicant that additional information was needed;
  • Allow exclusions covering ranges of certain dimensions with the same Harmonized Tariff Schedule (HTS) code in order to clear up confusion surrounding the form, simplify the application process for manufacturers to prevent duplicative requests, and reduce the time it takes the Bureau of Industry and Security (BIS) to review and vet applications;
  • Allow trade associations to apply for exclusions for an industry in order to save both manufacturers, particularly small businesses, time and money;
  • Take measures to protect sensitive information and trade secrets, including proactively informing applicants about avenues to protect sensitive information and trade secrets and excluding unnecessary application requirements such as metallurgical composition;
  • Provide timely information to companies requesting exclusions, including status and anticipated wait time;
  • Publish an “FAQ” page clarifying the exclusion request process in plain language;
  • Incorporate the concept of grandfathering existing contracts in evaluating exclusion applications in order to avoid undue disruption to the operations of U.S. companies that are already relying on qualified suppliers of needed inputs;
  • Regularly review the impact of tariffs on the economy and downstream users and implement a plan to sunset them if they prove to have a significant negative impact;
  • Consider the needs of U.S. manufacturers for custom-made and other specialized steel and aluminum inputs, many of which are not available from domestic producers and for which an advance application may be impractical due to one-off orders; and
  • Authorize all companies granted product exclusions to import tariff-free from any source country unless it is proven to be unfairly traded, given that the basis of the exclusion request is that the U.S. company cannot source the product domestically

Also last week: the Congressional Aluminum Caucus asked the Trump administration to “narrow” its strategy in addressing global overcapacity of the metal, telling Secretary Ross not to use a “blanket, one-size-fits-all approach.” Rep. Suzan DelBene (D-Wash.) said, “We need to focus our attention on the source of the problem instead of hurting our closest allies and responsible trading partners through a reckless trade war that will raise prices on consumers and result in hard-working Americans losing their jobs.”

To date, the Commerce Department has received more than 7,500 steel exemption requests and more than 1,200 aluminum requests. Click here to learn how to request exclusion from the Section 232 tariffs. 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 earlier this year, Secretary Ross promised that any products that are excluded would be protected retroactively. 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.