Section 232 Steel and Aluminum Tariff Exclusion Requests Continue Apace

A lot has changed since the Trump administration first imposed its controversial tariffs on foreign steel and aluminum two years ago. As our continuing analysis of these “Section 232” tariffs has demonstrated, US manufacturers have applied for relief tens of thousands of times through the program’s “exclusion request” process.

But these applications have not gone without protest: US steel and aluminum producers have formally objected to these requests for relief thousands of times, and the government often denies those exclusion requests that are the subject of these objections.

Meanwhile, our analysis has been complicated by the creation, in June of last year, of a new internet portal to house exclusion data, replacing the old portal at regulations.gov. As a result, the data from regulations.gov and a new portal must be combined to get a full picture of exclusion activity. Combining the data shows that there have been a total of 93,933 steel exclusion requests, of which 50 percent have been approved, 14 percent have been denied, and 36 remain pending. For aluminum, there have been 13,249 exclusion requests, with 49 percent approved, 7 percent denied, and 45 percent pending (table 1).  

Looking at the most recent data on the new portal shows that between June 13 and December 6, 2019, US companies filed 31,136 steel tariff exclusion requests (excluding the 526 that have been withdrawn). Of those, 16,595 were approved, 1 was denied, and 14,540 remain pending. During that same period, US companies filed 3,275 aluminum tariff exclusion requests (excluding the 110 that have been withdrawn). Of those, 1,465 were approved, 0 were denied, and 1,810 remain pending.

Objections remain consequential. The government has yet to approve a single steel or aluminum exclusion request for which an objection was filed on the new portal. At the same time, most of these requests haven’t been rejected either but remain pending.

A Tangled Web

On March 8, 2018, following recommendations by the Commerce Department, President Donald Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports. But US producers are not left without the option for relief: if Commerce does not deem those tariffed materials essential for national security and there is no domestic supply, then struggling US manufacturers can request to be excluded from the tariffs. Once that request is posted, domestic steel and aluminum manufacturers have 30 days to object to it on the grounds that they can produce the product domestically.

US manufacturers can then file a rebuttal to an objection to their request within the next seven days, to which the original steel and aluminum manufacturers that filed the objection can file a rebuttal to the rebuttal (called a “surrebuttal”) in the subsequent seven days.

As table 1 displays, as of December 6, 2019 on the new portal, US manufacturers filed 34,411 total exclusion requests, including 31,136 for steel and 3,275 for aluminum. Despite these large totals, a relatively small number of firms filed the requests, with 504 companies filing steel exclusion requests and 124 firms filing aluminum exclusion requests.

Objections Still Matter

In our earlier analysis, we reported that objections are important because they appear to significantly influence Commerce’s decisions. When we wrote that analysis, less than one percent of the steel exclusion requests with an objection had been approved. Of those remaining, some were denied, but most (89 percent) were still pending. Similarly, Commerce had approved only 2.7 percent of aluminum tariff exclusion requests with an objection, and most of those (95 percent) were still pending.

Just looking at the exclusions with an objection (not reported in the table), with the new portal, none of the steel or aluminum exclusion requests with an objection have been approved and all remain pending. Specifically, for steel, producers have filed objections against 6,371 steel tariff exclusion requests, and of those, none have been approved and all remain pending. Of the steel tariff exclusion requests with no objection (24,765), 16,595 were approved, 1 was denied, and 8,169 remain pending.

For aluminum, producers filed objections against 709 aluminum tariff exclusion requests, and of those, none have been approved and all remain pending. Of the aluminum tariff exclusion requests with no objections (2,566), 1,465 were approved, 0 were denied, and 1,101 remain pending. In other words, the updated data indicate that objections still matter.

What’s Up with the New Portal?

This update to our continuing series analyzing Section 232 tariff data comes amidst a significant administrative reform to the tariff exclusion process: all new data on the exclusion requests and objections to Section 232 tariffs are now hosted on a new online portal rather than on regulations.gov as they were before. This change has introduced data inconsistencies that complicate comparisons.

As of June 13, 2019, all submissions have been filed only on the new portal, instead of at regulations.gov. With the new online portal, the Department of Commerce aims to streamline the exclusions process and enhance data integrity and quality controls. The new online portal reports the data and information on each tariff exclusion request, corresponding documents, objections, rebuttals, and surrebuttals differently from the old portal. For instance, information about objections to exclusion requests on the new online portal is not as easily accessible. The updated data in this piece are taken from the new submissions on the new portal and not those from regulations.gov.  

Firms continue to file thousands of exclusion requests each month. Indeed, the numbers have been increasing. Between June 13, when the new online portal became active, and August 27, a monthly average of 4,427 exclusion requests was filed. Between August 28 and December 6, the monthly average filings increased to 7,190. Also, objections still play a major role in the decision-making process. For exclusion requests filed on the new online portal, as of this writing, none of the steel or aluminum tariff exclusion requests with an objection have been approved. We will continue to monitor and update the data from the new section 232 portal.

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