The Department of Commerce has released information setting forth the process for how parties in the United States may submit requests for product-based exclusions from tariffs implemented by President Trump under Section 232 of the Trade Expansion Act of 1962 to protect national security from threats resulting from imports of aluminum and steel, as previously detailed in two presidential proclamations. See Trump and Trade Update dated March 13, 2018. The March 8, 2018 proclamations authorize the secretary of Commerce to grant exclusions from the tariffs upon the request of affected parties if the steel or aluminum articles are determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality or based upon specific national security considerations.
In a Federal Register notice published Monday, March 19, 2018, Commerce issued an “interim” final rule seeking comments on the manner in which it intends to implement the requirements for submissions requesting product-based exclusions from the tariff remedies. While interim in nature, the notice indicates that sufficient conditions have been met to immediately implement the rule and, in turn, the requirements for seeking a product-based exclusion. Because, the notice states, normal clearance procedures would prevent or hinder the collection of information for national security purposes, and a delay in an effective date while seeking public comment could harm national security, the requirements for requesting product-based exclusions from the Section 232 aluminum and steel tariffs will be effective March 19.
The notice provides specific guidance as to how individuals or companies using steel or aluminum articles in business activities in the United States may submit product-based exclusion requests. The notice is clear that these exclusions will be limited to entities located in the United States, since allowing those not engaged in business activities in the United States to seek such exclusions “could undermine the adjustment of imports that the President determined was necessary to address the threat to national security posed by the current import[s]” of these articles. Further, any approved exclusions will be made on a product basis and will be limited to the individual or organization that submitted the request, unless Commerce approves a broader application of that particular product’s exclusion. The notice also makes clear that the country-based exemptions to be handled through negotiations by the U.S. Trade Representative are separate and apart from the product-specific exclusion process.
Commerce is requiring that exclusion requests be filed using specific forms: Steel Exclusion Forms and Aluminum Exclusion Forms. For each, the requesting party must provide factual information on (1) the single type of steel/aluminum product it requires, using a 10-digit HTSUS code; (2) the quantity of product required under a one-year exclusion; and (3) a full description of the properties of the steel/aluminum product it seeks to import, including chemical composition, dimensions, strength, toughness, ductility, magnetic permeability, surface finish, coatings, and other relevant data. In addition, a detailed explanation must be provided concerning why the exclusion is necessary, the application for the product (e.g., automotive, appliances, industrial products structural, etc.), and why similar products manufactured in the United States, if available, are not suitable. A separate exclusion request must be filed for each distinct product to be imported.
Forms for objecting to exclusion requests are also posted at these web pages. All filings will be public. Parties that have proprietary or business confidential information they believe to be relevant for consideration will need to indicate so on the forms. There is no time limit for submitting a product-based exclusion request.
Individuals and organizations that manufacture steel or aluminum products in the United States may file an objection to a submitted exclusion request within 30 days of the posting of the request. In filing an objection to an exclusion request, the submitting party must provide specific information on the product that its company can manufacture that is comparable to the steel or aluminum product under consideration for a product-based exclusion. This information should include (1) the suitability of its product for the application identified by the party requesting the exclusion and 2) a full technical description of the properties of the product it manufactures relative to specifications provided in the exclusion.
Exclusion requests will be open for public review after they are posted to the federal rulemaking portal. After the initial 30-day period in which objections may be filed, approximately 60 days will be necessary for complete review and vetting of the exclusion request and any related objections. The total processing time for exclusion requests is estimated at 90 days. Approved exclusions will be effective five business days after publication of the responses in the appropriate dockets for aluminum (Docket No. BIS-2018-0002) and steel (Docket No. BIS-2018-0006) on www.regulations.gov. Starting on that date, the requesting party will be able to rely upon the approved exclusion request in calculating the duties owed on the product imported in accordance with the terms listed in the approved exclusion request. Exclusions will generally be approved for one year.