Federal Agency Recommends Changes To Section 232 Tariff Process
On December 13, the U.S. Government Accountability Office (GAO), a federal legislative branch agency that provides auditing, evaluation, and investigative services for the U.S. Congress, released a report that recommended changes to the U.S. Department of Commerce’s Section 232 steel and aluminum tariff exclusion process.
U.S. lawmakers had requested that the GAO review the process and on exclusion requests.
The GAO examined three things: changes to the procedures the Commerce Department uses to decide tariff exclusion requests, and the guidance it provided about those exclusions; the extent to which the department rejects requests because of errors; and the timeliness of its decisions.
It found the Commerce Department averages 143 days to decide the fate of an exclusion request that receives objections. That term is significantly longer than the 90 days identified in the Commerce Department’s exclusion guidance.
The GAO also found the Commerce Department has rejected a lower percentage of exclusion requests for containing errors since launching its Exclusion Portal website in June 2019: 10 percent of requests compared with 18 percent of requests submitted to Regulations.gov. Rejected requests typically include incorrect or incomplete information. Nevertheless, more than 22,000 requests submitted to the Exclusion Portal have been rejected for such errors, which means importers must submit new requests and wait longer for relief. The Commerce Department told GAO it plans to further reduce the rejection rate by adding features to the Exclusion Portal to prevent errors.
As a result of its findings, GAO recommended that the Commerce Department:
- Create an internal policy to review and regularly update guidance for the exclusion process to ensure it is fully up-to-date in summarizing agency practice; and
- Update the agency’s guidance regarding the amount of time that is typically required to issue a determination in response to a request for an exclusion.
MSCI is reporting this news for members’ information only.
As a reminder, MSCI consistently has argued that global overcapacity and other unfair trading practices, particularly by China, have harmed the U.S. steel and aluminum markets. To address this circumvention, in 2017 MSCI advised federal officials to provide relief for producers up and down the supply chain and to consider the consequences of any new trade policy, including: the economic impact of global overcapacity on the entire domestic metals supply chain; transition times and implementation rules to any new policy; availability of domestic metals to meet U.S. national security needs, as well as general industrial and consumer demand; and trade flows under current free trade agreements, including the United States Mexico Canada Agreement (USMCA).
MSCI also asked that Canada and Mexico be excluded from any trade penalties. Click here to review all of MSCI’s advocacy on Section 232 tariffs.