October 23, 2018
The U.S. Department of Commerce (DOC) Bureau of Industry and Security (BIS), which is overseeing the exclusion request process for Section 232 tariffs on imported steel and aluminum, has already received more than 40,000 exclusion requests. To help mitigate the backlog, BIS recently updated the exclusion request process. Also, the Secretary of Commerce is now authorized to grant exclusions for items “not produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality, and upon specific national security considerations.”
Unfortunately, the terms above are subject to interpretation, according to the Coalition of American Metal Manufacturers and Users (CAMMU). “Reasonably available” has been interpreted by BIS as “within eight weeks,” and replacement steel or aluminum need not be identical to the foreign-produced products, but instead must merely be a substitutable product.
Before final decisions are made, the Section 232 tariffs exclusion process also now includes four steps:
- The initial submission.
- An opportunity for companies to object to the initial submission. Thus far, nearly 20,000 objections have been filed, largely by U.S.-based steel and aluminum producers.
- A rebuttal opportunity for the company initially submitting the exclusion request.
- A final response from BIS to the rebuttal. Thus far, BIS has issued fewer than 5,000 exclusions.
“Although few, DOC has been granting some exclusions,” said Christine J. Sohar Henter, of counsel with NAFEM’s legal partner Barnes & Thornburg. “Companies have successfully requested exemptions with quantitative limits, for example, X number of items needed for one year.” Product exclusions are granted for one year, after which companies need to reapply.
“We’ve not yet seen successful exclusions citing ‘national security considerations,’ perhaps because this term hasn’t been defined by DOC,” added Christine.
There are two Section 232 exclusion request forms, one for steel and another for aluminum, as well as objection, rebuttal, and sur-rebuttal forms for each product. BIS estimates that it will receive nearly 100,000 exclusion requests, up significantly from their initial estimate of 4,500 requests.