Evaluation of Exclusion Requests for Section 232 Tariffs Drives Rep. Walorski's Criticism of Process
Calling the Section 232 exclusion process for steel and aluminum products "a master class in government inefficiency," Rep. Jackie Walorski, R-Ind., sent a letter to Commerce Secretary Wilbur Ross pointing out patterns of denials that she suspects mean the Commerce Department puts the burden of proof on requesters, not on the producers who object.
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Walorski, who publicly released the letter May 1, dove deep into individual companies' denials, pointing out, for instance, that a U.S. company that said it could supply the steel products that were the subject of an exclusion request from Mirror Metal produces far less than the volume of the imports that were denied a tariff break. She wrote that TSA Processing can only produce 3,000 metric tons in a year, but that denials of the products that TSA was the only objector for added up to 4,861 metric tons.
Walorski gave an example of a company that objected, which said it would take 13 weeks to deliver the metal. The regulation says that domestic supply should be available within eight weeks to be considered a true competitor for the import.
Her staff found numerous errors in how postings were labeled, as well as sloppy Decision Memos. In one example, Commerce Department officials wrote that "CBP has advised BIS that the product description is inconsistent with the claimed classification ... providing the following guidance: [insert CBP denial language here]."
"Looking at them in totality gives the appearance of pervasive lack of attention to detail, a prioritization of quantity over quality, and subpar quality control," she wrote. Walorski noted that in the initial rationale for the tariffs, Commerce said the steel industry needs to be using 80 percent of its capacity. It is hitting that rate at least intermittently now. She asked, "How long does the 80% capacity utilization rate need to be sustained in order for the steel and aluminum tariffs to be lifted (a quarter, six months, a year, etc.)?"
She said companies that have received exclusions don't know how to ask for a renewal once the one-year exclusion is up. Is there an expedited procedure for renewal, she asked. Will Commerce publicize how renewals can be applied for?
She concluded by writing that her office would like to help Commerce officials make sure "the exclusion process is transparent, fair, efficient and functional for all participants. However, I continue to see little to give me faith that those four ideals are being met."
The Commerce Department did not respond by press time.