Walorski Statement on GAO Report on Section 232 Tariff Exclusion Process

Tuesday, September 15, 2020

Walorski Statement on GAO Report on Section 232 Tariff Exclusion Process

Comprehensive Review of Steel and Aluminum Exclusions Finds Inefficiency, Inconsistency, Failure to Review Economic Impact

WASHINGTON – U.S. Rep. Jackie Walorski (R-Ind.) today released the following statement on the report published by the Government Accountability Office (GAO) regarding flaws in the Section 232 steel and aluminum tariff exclusion process:

“The GAO report further confirms what anyone involved in the Section 232 tariff exclusion process already knows: it has been inefficient, inconsistent, opaque, and unfair.

“The Commerce Department failed to meet its own deadlines 79 percent of the time – including for 96 percent of requests with objections. It reached decisions without verifying claims made by requesters and objectors alike. It denied thousands of requests without further explanation, even though domestic producers cited production and delivery timelines that did not meet the department’s own standards. And most concerning of all, it has yet to fulfill repeated promises to myself and the Ways and Means Committee to regularly review the impact of steel and aluminum tariffs on American manufacturers, suppliers, and the economy as a whole.

“The Commerce Department should take immediate action to implement the GAO’s recommendations. I look forward to reviewing the results of a pending inspector general investigation and further GAO reviews, as well as continuing to work to improve the fairness, transparency, and efficiency of the process.”

BACKGROUND

Congresswoman Walorski has repeatedly pressed the Commerce Department to fix problems faced by businesses seeking relief from Section 232 steel and aluminum tariffs. American businesses can request the exclusion of a product from tariffs if the product is not available domestically in sufficient quantity or quality. In November 2018, Walorski co-requested a GAO review of the process that concluded with today’s report.

In July 2020, Walorski submitted a letter in response to the department’s request for public comment on the exclusion process. Last year, Walorski sent three letters to Commerce Secretary Wilbur Ross outlining her concerns that U.S. manufacturers and small businesses seeking relief from steel and aluminum tariffs are being treated unfairly. In October 2019, the Department of Commerce Office of Inspector General (OIG) found “a lack of transparency that contributes to the appearance of improper influence in decision-making for tariff exclusion requests under Section 232.”

Findings of the GAO report, “Commerce Should Improve Its Exclusion Request Process and Economic Impact Reviews,” included:

  • Commerce failed to meet timeless guidelines for decisions. “According to our analysis of agency data, as of November 18, 2019, Commerce did not meet timeliness guidelines for 79 percent of the decisions it made on exclusion requests (60,049 of 76,412). … Ninety-six percent of exclusion requests with objections did not meet timeliness guidelines compared with 75 percent of exclusion requests without objections.”
  • Commerce has not conducted semi-annual reviews of tariff impact. “Commerce indicated in written responses provided to the U.S. House of Representatives Committee on Ways and Means that the Secretary had directed the department economists to conduct semi-annual reviews of the impacts of the steel and aluminum tariffs, including on downstream sectors. However, Commerce was unable to identify the agency officials responsible for regularly reviewing the impacts of the Section 232 tariffs. Moreover, we were unable to determine whether Commerce conducted any regular reviews of the tariffs’ impacts, and agency officials were unable to produce documentation containing the results of any reviews.”
  • Commerce decisions rely on unverified claims and lack consistency. “Commerce relies solely on the information requesters and objecting parties provide in the forms they file and does not verify the validity of that information, according to Commerce officials. For instance, Commerce does not confirm whether the requester actually requires the quantity requested or a domestic producer can fulfill the quantity it states it is able to provide. … We also found 6,548 instances where BIS denied the exclusion requests even though the objector had indicated it would possibly take longer than 8 weeks to provide the product.”

Walorski represents the 2nd Congressional District of Indiana, serving as a member of the House Ways and Means Committee.

###

Get News & Updates