Senate Appropriations Commerce, Justice, and Science Subcommittee members confronted the Bureau of Industry and Security (BIS) exclusion process for Section 232 trade remedies on steel and aluminum during a trade oversight hearing on Thursday.
The subcommittee understands that as of Aug. 20, the Commerce Department had received about 15,000 industry objections to approximately 9,600 exclusion requests filed in response to Section 232 steel and aluminum tariffs and that decisions had been made only for about 4 percent of those exclusion requests, said subcommittee Chairman Jerry Moran, R-Kan.
Moran went on to note that 95 percent of the 376 decided exclusion requests have been denials and said the existing exclusion/objection process seems biased in favor of objectors.
Moran’s numbers “differ slightly from mine, which I think is a timing [issue,] but I think the general trends are not wrong,” BIS Assistant Secretary for Export Administration Richard Ashooh said. “Of the posted decisions that we have, which is about 4,000 posted, we don’t like the processing time. We allowed ourselves 90 days. We’re within that, but that’s still a long time.”
Ashooh added that BIS submitted an interim final rule to be published in the Federal Register setting forth a more adequate rebuttal process for entities seeking to counter objections to their exclusion requests.
The interim final rule should bring more clarity to the rebuttal process, he said.
The Section 232 product exclusion process — which also involves work by U.S. Customs and Border Protection — is “very cumbersome,” and BIS is looking for other improvements to the process, which would likely include “some sort” of information technology “solution,” Ashooh said.
In total, BIS is actively processing 25,045 steel exclusion cases and has finished processing 10,380 steel exclusion applications, including decisions and rejected improper submissions, Ashooh said in written testimony for the hearing.
Moreover, BIS is actively processing 3,610 aluminum exclusion cases and has finished processing 784 aluminum exclusion applications, including decisions and rejected improper submissions, Ashooh wrote.
Subcommittee ranking member Jeanne Shaheen, D-N.H., said the Section 232 steel and aluminum remedy exclusion process is “burdensome and opaque,” creating “a mountain of red tape, forcing small businesses to spend precious time and resources to rework their operations.”
One of Congress’ most vocal opponents on steel and aluminum tariffs, Sen. Lamar Alexander, R-Tenn., asked Ashooh whether BIS took into account the position of U.S. aluminum producer Alcoa, which Alexander noted produces half of U.S.-produced aluminum and also opposes the 10 percent Section 232 tariff.
Alexander called the tariffs an “abuse of authority,” noting that they don’t apply only to defense articles but also to consumer goods such as aluminum foil and apply to Canada, a U.S. ally that produces much of the steel consumed in this country.
Ashooh noted that the Commerce Department-led Section 232 aluminum investigation focused mainly on global overcapacity and that tariffs are part of a Trump administration effort to increase the aluminum industry’s utilization of domestic capacity to 80 percent from its current 57 percent utilization.