The Trump administration has granted about one out of every five requests made to date by companies to have a product excluded from the new steel tariffs. It has also granted about one of out every eight requests for an exclusion from its aluminum tariffs. Exactly who is getting the exclusions and why is harder to tell.
The Commerce Department has made all the requests and their status public, but has not compiled the data in any way. So while individual requests can be looked up, it is an otherwise needle-in-a-haystack exercise.
Whether particular interests or sectors are getting treated differently from another is difficult to discern, as is whether standards are being applied evenly and fairly. While the number of exclusions may seem high, those involved in making the requests say the process is cumbersome, bureaucratic and often opaque.
“As of October 8th, 39,279 steel and 4,939 aluminum exclusion requests have been filed. Overall, 11,526 steel exclusion decisions have been posted (7,670 were approved), while 805 aluminum decisions have been posted (663 approved),” Commerce Department spokesman Kevin Manning told the Washington Examiner.
“Unfortunately, there’s no separate database (beyond) what is publicly available on regulations.gov,” Manning said.
The administration officially instituted the tariffs, 25 percent for steel and 10 percent for aluminum, in March. They cover all imports, but the administration grants exclusions on a case-by-case basis if it decided that wouldn’t harm “national security” — that is, because the product isn’t available domestically otherwise.
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The U.S. has also granted exemptions to entire countries, such as Mexico and Canada. Those were revoked earlier this year in order to pressure both countries to make concessions for the eventual U.S.-Mexico Canada Agreement on trade. Now that a deal has been reached, discussions are ongoing to restore the exemptions, sources in both the U.S. and Canadian governments report, but no deal appears imminent.
Companies that depend on imports for their products have flooded the administration with exclusion requests. Those who try describe the process as a bureaucratic maze. Domestic producers can, and usually do, object to any exclusion requests. The submitter can then object to the objections and then both wait for the department to rule on request.
“Until recently, there wasn’t even a process for responding to objections. You put in the application, the domestic industry would oppose and there would be nothing else to do. Commerce would just reject it,” said a Washington-based attorney who handles applications for companies.
In an August letter to the Commerce Department’s Inspector General’s Office, Sen. Elizabeth Warren, D-Mass., questioned an exemption given to the U.S. branch of a sanctioned Russian company with ties to President Vladimir Putin. The department rescinded the exemption following Warren’s letter, stating it was given in mistake due to a clerical error. Warren’s office did not respond to a request for comment.
C.J. Madonna, general counsel for Schluter Systems, North America, a Plattsburgh, N.Y.-based tile company, says his business has been making about 40 requests a week for products since the department started accepting them. It has to be that many because even the slightest variation in size, thickness, or even color in the product requires a separate submission.
“It’s time-consuming, but we’re going to do what we have to do,” said Madonna, who said they had had several requests approved, but could provide an exact figure, noting that many requests remain outstanding.
There’s technically no cost to applying for an exclusion. Anyone can make one, and the department doesn’t charge anything to process one. However, it can nevertheless cost a company several thousand dollars to try due to attorney fees and the time necessary to compile the information to make the case.
Even in cases where no one objects to a request, it can still get rejected. “The reason usually given by the department is ‘insufficient submission.’ You ask, ‘What was incomplete?’ and they’ll say something like, ‘We talked to Customs and there was an issue.’ And that’s all you get. There’s no transparency,” the lawyer said. “It wasn’t set up to help people import steel. It was set up to keep steel out.”
