Exclusions on Steel Tariffs Create Confusion

Steel importers are winning most of their requests for tariff exclusions for products they say they can’t find in the U.S., but the process is riddled with inconsistencies and frequent procedural changes, according to manufacturers and importers.

As of Dec. 17, the Commerce Department has granted about 75 percent of the 19,000 requests it processed to exclude products from tariffs on steel imports, according to a Wall Street Journal analysis of those applications. Exclusions issued so far cover 3.8 million tons of steel, or about 16 percent of the finished foreign steel entering the U.S. through 11 months of 2018.

In cases the department rejected, a U.S. metal producer often objected. In many cases, those producers say, the Commerce Department should reject the request because their company makes products analogous or identical to those an importer wants to buy abroad.

“We are willing and able to support substantial proportions of increased domestic demand for many steel products,” U.S. Steel said in a statement. The company restarted steelmaking furnaces at an Illinois mill earlier this year and is refurbishing equipment at other plants as a result of rising steel demand and higher steel prices.

The Commerce Department said it is revising its exclusion-request process to reach decisions more quickly. The department’s Bureau of Industry and Security introduced a rebuttal period in September for companies that said some rejections seemed arbitrary.

Manufacturers and other importers say some of their exclusion requests are still being rejected for reasons that aren’t fully explained.

Primrose Alloys Inc., a California-based importer of stainless-steel pipe, has had about half of its 474 exclusion requests denied. In some of those cases, Primrose President Bob Wren said, a competitor was granted an exclusion to import products nearly identical to those that his company had sought to buy tariff-free.

“None of it makes any sense,” Wren said.

Amanda Pitts, who is managing the exclusion process for U.S. Metals, has secured just seven of the 355 applications she has filed. She said the Commerce Department hasn’t explained in detail why most of her requests were rejected.

“The whole process is a nightmare,” she said.

The Commerce Department has reversed some decisions, including 518 denials in December.

Source: Wall Street Journal