Commerce Will Consider 'Blanket' Section 232 Tariff Exclusions, Retroactivity, Ross Tells Ways and Means Hearing

The Commerce Department will give blanket exclusions to the Section 232 tariffs on steel and aluminum in some cases, Commerce Secretary Wilbur Ross said at a March 22 House Ways and Means hearing. "We do have the discretion to make broader exclusions available to all importers of those particular products if we find the circumstances warranted." Commerce may also allow for retroactivity for tariff exclusions and has asked CBP to use an "an escrow account," similar to the process for antidumping and countervailing duties, Ross said.

Determinations on whether an exclusion is given will be made public "on a rolling basis" and there will be an appeal process for denials, he said. The department released a final rule on March 19 that spelled out the exclusion request procedures (see 1803190028). Commerce already has received more than 100 inquiries for product exclusions and it hopes to take less than the allowed 90 days for interagency government review on all exclusion requests, he said. The tariffs take effect March 23.

Rep. Peter Roskam, R-Ill., asked about the need for individual exclusion requests for products that only vary slightly, such as the different diameters of steel wire. Although Commerce has the ability to give blanket exemptions, that won't be "the rule," he said. "We need specificity because" CBP needs the Harmonized System code number for each product, he said. "While I would have preferred a somewhat less bureaucratic system, it's not an alternative we really have," Ross said.

House Ways and Means Chairman Kevin Brady, R-Texas, pushed for limits on the tariffs in his opening statement. These tariffs should be in place for the absolute minimum period," he said. "Their effectiveness should be constantly studied. They should be sunset after one year. If they are not having the effect you intend, we should assess whether another policy would be more effective instead of continuing them."

Concerns about retaliatory tariffs, particularly for agricultural products, could be overblown, Ross said. "I think the real fear is of the unknown and they all know there's some potential vulnerability," Ross said. "I believe the actual outcome of all this will be far less severe than things that are worried about. Substitution of products from other countries, into China for example, displacing us, will be for the most part reopening those markets to American exports," he said. It's not easy to substitute, and if China thought they could get the material as cheaply from other countries, "they'd be doing it right now," Ross said.