Trade Cases

Cumbersome Product Exclusion Process Prompts Call for Relief from House Members

Written by Tim Triplett

May 10, 2018

In a bipartisan letter to Commerce Secretary Wilbur Ross on Monday, 39 members of the House argued that the process for reviewing Section 232 tariff exclusion requests is moving far too slowly. They urged Commerce to streamline the process and provide certainty and relief to the thousands of small businesses impacted by the tariffs.

Commerce announced the exclusion process on March 18 and since then has accepted thousands of applications. However, as of May 4, only 1,572 steel applications had been posted for public comment. It is clear more changes are needed, stated the House members, proposing a 10-point plan, paraphrased below:

  1. Provide relief to those experiencing undue delays by extending relief retroactive to the date of submission or the date the application was considered complete;
  2. Allow exclusions covering ranges of certain dimensions with the same Harmonized Tariff Schedule (HTS) code in order to clear up misunderstandings over the form, which contains confusing and contradictory requests.
  3. Allow trade associations to apply for exclusions for an industry to save manufacturers the time and money spent filing and the Bureau of Industry and Security (BIS) the time spent reviewing duplicative applications;
  4. Take measures to protect sensitive information and trade secrets by excluding unnecessary application requirements such as metallurgical composition;
  5. Provide timely information to companies requesting exclusions, including status and anticipated wait time;
  6. Publish a “FAQ” page clarifying the exclusion request process;
  7. Incorporate the grandfathering of existing contracts in evaluating exclusion applications to avoid undue disruption to the operations of U.S. companies that are already relying on qualified suppliers of needed inputs;
  8. 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;
  9. 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;
  10. 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.

Tim Triplett

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Price: Should billions in Section 232 revenue go to foreign manufacturers or to the American people?

Do we want the benefits of the Section 232 tariffs to flow to the bottom lines of foreign steel and aluminum producers or to the US government and, ultimately, domestic manufacturers and their workers? In our view, the answer is simple. Section 232 exceptions do nothing more than lead to underserved profits for foreign manufacturers who are harming the US industrial base. That revenue could be used to pursue the Trump administration’s other policy priorities - such as deficit reduction or expanded tax cuts.