Walorski Renews Concerns Over Lack of Fairness in Tariff Exclusion Process

Wednesday, May 1, 2019

Walorski Renews Concerns Over Lack of Fairness in Tariff Exclusion Process

In New Letter to Commerce Secretary Ross, Walorski Raises Concerns that Process Puts U.S. Manufacturers at Disadvantage

WASHINGTON – U.S. Rep. Jackie Walorski (R-Ind.) this week sent Secretary of Commerce Wilbur Ross a second letter in as many months to outline her growing concerns that U.S. manufacturers and small businesses seeking relief from steel and aluminum tariffs are being treated unfairly. Walorski has not yet received a response to her letter dated March 11, 2019, that raised questions about the product exclusion process.

“Since the process was established 13 months ago, it has been a master class in government inefficiency and plagued by maddening inconsistency,” Congresswoman Walorski wrote. “There are ways to fix the process and, as has always been the case, I am raising these myriad issues in hopes of working with you to improve its fairness, transparency, and efficiency for all participants.”

A copy of the letter can be found here.

Walorski has pressed the Department of Commerce to fix problems faced by businesses requesting relief from Section 232 steel and aluminum tariffs. American businesses can request a product be excluded from tariffs if it is not available domestically in sufficient quantity or quality.

In response to concerns raised by Walorski last year, the Commerce Department adopted several changes, including the creation of a rebuttal and surrebuttal process. On February 26, 2019, the Department began releasing decisions for steel exclusion requests that went through that process. The first such decisions for aluminum requests were released last week.

As outlined in the letter Walorski sent to Commerce Secretary Wilbur Ross this week, according to statistics compiled by Walorski’s office:

from February 26 (the first day decisions were released for requests that completed the rebuttal and surrebuttal process) through April 25, the Department has released 3,512 steel decisions in which it made a clear determination as to the domestic availability of a product. Of those, 385 were approved, while 3,127 were denied, resulting in a 10.96% rate of approval. It has denied an additional 832 requests that went through the rebuttal and surrebuttal process but did not receive a determination as to the domestic availability.

On April 24, the Department released the first tranche of decisions for aluminum in which it made a clear determination as to the domestic availability of a product. Of the 183 decisions, 20 were approved and 163 were denied, resulting in a 10.93% rate of approval.

Concerns and questions raised by Walorski in the latest letter include:

  • Who has the burden of proof: the requester or the objector? Does the burden shift if a rebuttal or surrebuttal is filed?
  • Given that the absence of a rebuttal results in a near-guaranteed denial (4.68% approval rate), why does the absence of a surrebuttal result in a low (37.76%) chance of approval?
  • What is the process for renewing approved exclusions, which are generally valid for one year? Is there any expedited procedure to renew an approved exclusion?
  • Does the Department verify an objector’s stated production capacity and plant capacity utilization?
  • Why were certain requests with no objections denied rather than put into an expedited decision process? What information did the Department rely on in denying these requests if no objections were posted?
  • What steps is the Department taking to ensure that it is not giving an unfair advantage to one competitor that requested an exclusion over another with a pending request for a similar or the same product?
  • If certain requests were ineligible for an exclusion from the start because the source country was subject to a quota, why were they posted and put through the rebuttal and surrebuttal process?
  • The Department’s stated goal for the steel and aluminum tariffs was that capacity utilization would reach 80%. What metric is the Department is using to track capacity utilization?
  • What measures is the Department taking to reduce wait times and speed up processing of requests, objections, rebuttals, surrebuttals, and decisions?
  • What interagency outreach and feedback does the Department undertake and take into account when it evaluates exclusion requests?
  • What are the Department’s quality control procedures for posting entries?
  • Do companies need to file new exclusion requests if the importer of record legally changed its name?
  • What is the standard for response time if a participant reaches out to the email addresses and phone numbers provided by the Department? How often are those standards met?

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

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