Who is Filing for Tariff Relief and How is the Exclusion Request Process Working?
By Christine McDaniel and Danielle Parks
Industry v. Industry
On March 8, following recommendations by the Commerce Department, President Trump imposed 25 percent tariffs on steel imports and 10 percent tariffs on aluminum imports. A tariff is a tax on imported goods, paid for ultimately by consumers and manufacturers that buy these materials for their own production processes. The tariffs afford protection U.S. domestic steel and aluminum makers to raise their prices as well. While U.S. steel and aluminum manufacturers are benefiting from these higher prices, U.S. manufacturers that use steel and aluminum in their production process are negatively affected by higher input costs. We can know where these higher costs are resonating by examining the list of companies that are filing requests for tariff relief, and we have matched them to their congressional district.
The Exclusion Process
U.S .manufacturers that use steel or aluminum in their production process may request for their purchases of these metals to be excluded from the tariff. The Bureau of Industry and Security (BIS) of the Commerce Department administers this tariff exclusion process. Firms may file a request on regulations.gov under separate dockets for steel (BIS-2018-0006) and aluminum (BIS-2018-0002).
The exclusion requests are generally granted “if there is no domestic availability and there are no overriding national security concerns with regard to the specific products,” according to a press release by the Commerce Department. Commerce Secretary Ross testified, however, that if a U.S. steel or aluminum producer can produce the product listed in the exclusion request, or might be able to make it if they were to ramp up future production, then Commerce would likely deny the request.
Companies’ Experience Filing Requests
Firms are required to submit a separate exclusion request for each distinct type and dimension of the imported product. The forms also require specific information such as the chemical composition, strength, toughness, list of entry ports, specific tariff code, expected amount for the year, etc. If the form has missing or incorrect information, then it will be denied. Firms or individuals can submit an objection to each exclusion request within 30 days of a submission, and BIS aims to process requests 60 days following an objection (so the entire process should take 90 days). As of September 11, the Commerce Department is allowing firms to refute the exclusion requests by filing a rebuttal within seven days of each objection submitted against the exclusion request. The steel and aluminum manufacturing firm that filed the objection can in turn submit a “surrebuttal” within seven days.
At a recent congressional hearing, U.S. companies revealed their experiences with the exclusion process. A broad range of U.S. firms testified that navigating the process was overly burdensome, can take more than 90 days, and often requires hiring outside lawyers.