Mercatus Center Scholar Suggests Section 232 Exclusion Changes

A scholar at the market-oriented Mercatus Center, a research organization at George Mason University, said that although 25% tariffs on steel and 10% tariffs on aluminum have now been in place for three years, there's no sign they've successfully reduced global overcapacity in those metals. Christine McDaniel, a senior research fellow at the center, cited a Wall Street Journal article that found that the steel industry was not revived by the price protection from imports. McDaniel wrote in a research paper that the administration should be asked what it would achieve to leave the tariffs in place indefinitely. But if they are to stay, McDaniel said the exclusions process should be reformed.

She said that of 205,379 steel exclusion requests, 63% have been approved, 21% have been denied and 16% remain pending.

There have been 21,223 aluminum exclusion requests, with 64% approved, 15% denied and 21% pending. About three-quarters of steel exclusions were renewed, compared with 66% of first-time requests, and about 90% of aluminum renewals were approved, compared with 70% of first-time requests.

Since June 2019, 762 firms have asked for one or more steel tariff exemptions, and 218 firms have asked for one or more aluminum tariff exemptions, the paper said. The top 15 filers account for more than half of all requests.

McDaniel said that objecting steel or aluminum producers should have to prove “that they are qualified suppliers for the specific product in the original request” and that they can fulfill the request within 90 days. She said objecting companies should have to report at 45 days that production is on track for that order. “If no midpoint progress report is filed, then the objection is disregarded, and objecting producers should be required to pay manufacturers the amount of import duties paid plus interest,” she wrote. She said that if the producer does not sell the product to the company that sought to import the good within 90 days, then the objection should be void, “and the producers should be required to compensate the manufacturer the amount of import duties paid plus interest.”