On September 7, 2018, the U.S. Department of Commerce, Bureau of Industry and Security (BIS), announced a series of significant changes to the current procedures for companies seeking product-specific exclusions to the Section 232 tariffs on steel and aluminum imports.
Since the announcement in March 2018 of these additional tariffs (25% on imports of steel and 10% on imports of aluminum), there has been tremendous frustration with the exclusion process. To date, Commerce has received approximately 38,000 tariff exclusion requests and has also received approximately 17,000 objections to such requests. This has resulted in confusion and backlogs at the administrative level, which has delayed the issuance of rulings.
The new exclusion process announced on Friday and expected to take effect on September 11, 2018, may offer some relief to this cumbersome process. The main changes are the addition of rebuttal and surrebutal submissions, which will give Commerce more information to consider when weighing the merits of contentious exclusion requests. While perhaps good in theory, these additional comment periods may simply lead to further delays in issuing exclusion requests. On a more positive note, the amended rule also provides that, if no objections are filed to a particular exclusion request, Commerce may speed up the process and, if no national security threat is found with respect to the subject imports, it will “expeditiously” grant the request. In addition, the amended rule provides further detail about the criteria Commerce uses to examine exclusion requests and establishes a range of steel and aluminum product dimensions that can be listed on an exclusion request form, in certain circumstances.
Commerce claims that it “understands the importance of having a transparent, fair and efficient exclusion and objection process.” The publication of this modified rule could make significant improvements in these respects. See FR Notice. However, this can be determined only after implementation of the new procedures.
The net result is likely that for some, the modified rule may offer key and timely relief, while for others the delays and bureaucratic complications may only get exacerbated.