Sen. Ron Johnson, R-Wis., demanded on Thursday that the Trump administration better explain its process for how some companies are granted exemptions to steel tariffs, claiming that businesses in his Midwest state find decisions to be “arbitrary.”
Johnson, whose state hosts the second most manufacturing-heavy job market in the U.S., wrote to Commerce Secretary Wilbur Ross that the administration’s denial of an exemption request for one Wisconsin business cost it $2.6 million.
“The Department’s denial of the exclusion request has resulted in [one] Wisconsin business incurring an additional $2.6 million tariff cost that can not be used to expand production or to pay salaries of new employees,” wrote Johnson, the chairman of the Homeland Security Committee. “Across the country, many businesses share the same frustration about the difficult and time-consuming process.”
Many industries, including the oil and gas sector, have complained about the Commerce Department’s process for considering exemptions to President Trump’s 25 percent tariff on steel.
Under the process, people or companies that use steel in their business or supply steel to users in the U.S. may apply for an exemption. But people and companies that oppose each proposed exclusion can also submit objections.
The administration said applicants must make separate exemption requests for each product.
Last month, the main U.S. oil and gas trade group scolded the Trump administration for denying its requests for relief from tariffs on imported steel.
“The administration’s denial of needed product exclusions from harmful tariffs on steel is bad news for American workers and consumers who have benefited from increased American energy production,” said Kyle Isakower, the American Petroleum Institute’s vice president for policy.
The group says the type of steel used in pipelines and other energy infrastructure is a niche market, and most domestic steel producers have left the pipeline market because of its high costs.
They said Trump’s tariffs could drive up the cost for projects that require steel.
In addition, the New York Times recently reported that two large U.S. steel manufacturers with ties to the Trump administration are taking advantage of the objection process. Charlotte-based Nucor, and Pittsburgh-based United States Steel have objected to 1,600 exemption requests filed with the Commerce Department over the past several months, the newspaper reported. None of those requests were approved.
Since May, companies have filed more than 20,000 requests for steel tariff exemptions. As of the end of July, the Commerce Department had denied 639 requests.
Johnson requested that Ross give his committee with up-to-date numbers on how many exclusion requests have been made and denied and how many domestic steel producers have filed objections.
