Background

The Department of Commerce should take steps to improve the effectiveness of the exclusion process for steel and aluminum products subject to additional tariffs under Section 232 of the Trade Expansion Act of 1962, according to a new report from the Government Accountability Office.

According to the report, between March 2018 and November 2019 the DOC received over 106,000 product exclusion requests but rejected over 19,000 prior to decision due to incorrect or incomplete information. The report claims that these rejections delay decisions for those requesting exclusion, create additional work for the DOC, and may limit the amount of relief a requester receives.

The DOC did approve two-thirds of all exclusion requests during the review period, although it most often denied requests that had technical errors or where a domestic producer had objected. Furthermore, the DOC did not decide 79 percent of steel product requests and 72 percent of aluminum product requests within its established timeliness guidelines and took more than a year to decide 841 requests. While the DOC has taken steps to improve timeliness, such as streamlining the review process for some requests and creating a new submission website, the agency still does not meet guidelines and had a backlog of 28,000 requests as of November 2019.

In light of these findings, the GAO recommends that the DOC (1) direct the Bureau of Industry and Security to identify, analyze, and respond to factors in the process that may cause submission errors; (2) direct BIS to identify, assess, and make program changes to address issues that have impeded timeliness and created the backlog of exclusion requests; and (3) assign responsibility for regularly reviewing the impact of the tariffs on steel and aluminum imports, including tariff exclusions, and document the results.

The DOC concurred with all three recommendations and said it has already taken action to reduce the number of rejected submissions and address other deficiencies. The agency also vowed to complement and strengthen its existing reporting and has taken steps to evaluate the impact of the tariffs.

For more information on the Section 232 tariffs, please see our Tariff Action Resources Page.

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