GAO: Commerce Needs to Fix Section 232 Exclusion Process

The report noted that the DOC received more than 106,000 requests for exclusions and rejected more than 19,000 of them “prior to decision due to incorrect or incomplete information.” Additionally, the report revealed that the DOC did not take any steps to understand or address the causes of these paperwork errors. Although the DOC did implement some changes to improve timelines, three-quarters of the requests were not addressed within the required guidelines, 841 of those took more than a year to be decided, and there was a backlog of 29,000 requests as of November 2019.

GAO added, “Until Commerce takes additional steps, companies will continue to encounter delays in obtaining relief.” The audit noted that the DOC has failed to address the impact of imposed tariffs, as there is evidence to suggest that U.S. steel and aluminum imports and markets have both seen downward corrections after initial surges. “Evaluating whether the tariffs have achieved the intended goals and how they affect downstream sectors requires more in-depth economic analysis. Without assigning responsibility for conducting regular reviews and documenting the results, Commerce may be unable to consistently assess if adjustments to the tariffs are needed,” the report concluded.

As a result, GAO recommended the DOC take the following steps to improve their process: “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.”