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. 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 to be published on Monday, March 19, 2018, Commerce is issuing 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 (e.g., construction, manufacturing or supplying steel/aluminum to users) 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 submissions requesting exclusion be filed using specific forms – Steel Exclusion Forms and Aluminum Exclusion Forms – that will be posted shortly on Commerce’s website. Forms for objecting to exclusion requests will also be posted at these web pages. Commerce notes that information submitted in exclusion requests and objections to submitted exclusion requests will be subject to public review and made available for public inspection and copying. Parties that have proprietary or business confidential information they believe to be relevant for consideration will need to indicate so on the forms. A party making an exclusion request must specify its business activities in the United States that provides it authorization and sufficient reason to request an exclusion. Exclusion requests (i.e., forms) that are incomplete will be denied. There is no time limit for submitting a product-based exclusion request.
The review process for considering an exclusion request (and any objections) will normally not exceed 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.