Steelmakers apply pressure on the White House

The Biden administration has felt the heat from domestic steel and aluminum producers about offering too many exclusions from the tariffs on imported steel and aluminum. sdlgzps/Getty Images

The Department of Commerce has quietly made it more difficult for importers to skip paying the 25% tariff on imported steel and 10% tariff on imported aluminum.

In December the Department of Commerce’s Bureau of Industry and Security (BIS) dropped 26 steel and four aluminum general approved exclusions (GAE) of the 123 GAEs approved on Dec. 14, 2020. Those GAEs refer to specific product categories for which U.S. importers do not have to apply for an exclusion from the tariffs to avoid paying the tariffs.

Steel manufacturers want the Commerce Department to eliminate the 93 GAEs that remain. In the statement to The FABRICATOR, Kevin Dempsey, president/CEO of the American Iron and Steel Institute (AISI), wrote: “AISI continues to have serious concerns with the general approved exclusions (GAEs) from the Section 232 measures on steel. Despite recent action taken by the Commerce Department to remove 26 steel products from its list of GAEs, there remains a significant number of products covered by GAEs that are currently produced by domestic steelmakers or that could easily be produced by the domestic industry. Any steel products that can be made domestically should not be subject to blanket exclusion from the Section 232 program. Our position remains that Commerce should immediately suspend the entire GAE program until it can implement a regulatory review to ensure that no steel products that can be sourced domestically are excluded from the Section 232 program by the GAEs.”

The Commerce Department’s BIS created the GAE program in December 2020 after hearing from both domestic steelmakers and importers on problems in the exclusion process following former President Donald Trump’s announcement of the tariffs in 2018. The March 2018 Trump proclamation establishing the steel and aluminum tariffs allowed the secretary of commerce to grant exclusions from the duties if the secretary determined the steel or aluminum article for which the exclusion is requested is not “produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality” or should be excluded “based upon specific national security considerations.” The secretary also had the authority to issue procedures for exclusion requests.

The BIS has consulted with both domestic steel manufacturers and importers, asking them how to improve the exclusion process, which has been criticized by importers for the length of time it takes to either approve or deny an individual company exclusion request. The Coalition of American Metal Manufacturers and Users (CAMMU), an import group, argued in mid-2020 that 30,463 of 91,149 exclusion requests were still “pending” at that time. One importer that belongs to a CAMMU member trade association had been waiting for a decision on its exclusion request since August 2019, which still pales in comparison to some exemptions pending for more than 600 days, the CAMMU wrote in 2020.

Those complaints convinced the BIS to establish the 123 GAEs in Dec. 14, 2020. One year later, on Dec. 9, 2021, the BIS announced it was canceling 30 of the 123 GAEs because “subsequently, based on Commerce's review of the public comments received in response to the Dec. 14 rule and additional analysis conducted by Commerce on the Section 232 exclusion request submissions, Commerce determined that a subset of the GAEs added in the Dec. 14 rule no longer meets the criteria for inclusion as a GAE and should therefore be removed.”

The 30 cancellations were based on the BIS admission that it had essentially put together the GAE list after U.S. steel producers had already submitted objections to some of the particular GAEs. The GAE is supposed to include only Harmonized Tariff Schedule of the United States (HTSUS) codes for products unavailable in the U.S. The GAE list also included several HTSUS codes for which the Commerce Department had previously denied exclusion requests—hence the 30 subtractions.