Changes Proposed to the Steel and Aluminum Exclusion Process
On August 28, 2023, the Commerce Department’s Bureau of Industry and Security (BIS) released a proposed rule (https://www.regulations.gov/document/BIS-2023-0021-0001) that would revise the existing Section 232 exclusion process for steel and aluminum. If finalized, this would mark the sixth change (https://www.bis.doc.gov/index.php/232-steel) (https://www.bis.doc.gov/index.php/232-aluminum) to the exclusion process since its start in 2018. BIS could finalize the rule as well as changes to the process this winter.
The changes could impact importers and users of steel and aluminum. Over the past five years, according to data compiled by Congressional staff from BIS (https://232app.azurewebsites.net/steelalum), 1,101 companies requested 321,213 exclusion requests for imports of steel, with 19,586 aluminum exclusion requests posted from 282 companies as of August 23, 2023.
In this video from The Franklin Partnership, contributing author Omar Nashashibi previews the four proposed changes BIS released in August and discusses some of the issues raised by the 93 commenters who filed by the October 12, 2023 deadline for public input.
In its proposed rule, BIS put forward for public input for possible changes to the Section 232 steel and aluminum exclusion process:
- Change criteria for General Approved Exclusions to include products receiving objections with “very low rates of success;”
- Creates General Denied Exclusion classification for goods that “have very high rates of successful, substantiated objections.”
- Requires exclusion objectors to certify that they “made reasonable efforts” to source the product domestically or from a country with which the U.S. has an alternative agreement to the 232; and
- Requires objectors to the exclusion request to certify that they can supply “comparable quality and quantity of steel or aluminum and make it ‘immediately available’.”
Background
In 2018, former President Trump imposed tariffs of 25% on imported steel (https://www.commerce.gov/issues/trade-enforcement/section-232-steel) and 10% on aluminum (https://www.commerce.gov/issues/trade-enforcement/section-232-aluminum) from all countries, except Brazil, Argentina, Australia, and South Korea, who reached an agreement to avoid the tariffs. Further negotiations led to agreements with Mexico, Canada, European Union, United Kingdom, and Japan to also avoid their imports being subject to the tariffs.
To help alleviate the burden on U.S. industry using imported steel or aluminum, the Trump administration created a process to request that the Commerce Department exclude an imported product from the tariffs through the Section 232 Exclusion Process and run by the Bureau of Industry and Security at the Commerce Department. The exclusion process to request a temporary suspension from paying tariffs on specific imported steel and aluminum products remains in effect today. Companies producing a similar product may object to a petition to lift the tariffs, all through the government’s exclusion process.
As BIS considers the public comments and changes, the process remains open for companies to request an exclusion for a specific product and object to those requests.
To view the exclusions filed on the 232 exclusion process, visit: https://www.commerce.gov/page/section-232-investigations
For more information on the proposed rule, or to find out if a product is already on the GAE list, or to learn more about filing or objecting to a request, Contact us.
Jennifer Clement is an executive sales and marketing leader specializing in value creation for the C-suite. In her current role at CLA, Jennifer collaborates on strategy with executives of global manufacturing and distribution companies to accelerate results. Previously Jennifer served as a Global Business Acceleration Leader for Complete Manufacturing and Distribution (CMD). During her time with CMD, Jennifer lived and worked in Asia from 2015-2019. Prior to CMD, she spent 10 years in senior care technology. Jennifer started her career at Johnson Controls (JCI) and spent nine years in leadership roles; followed by five years at Rockwell Automation (ROK) leading c-suite strategy and marketing operations.
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