Trump's new tariffs of 25% on steel and 10% on aluminum illustrates how Trump’s interventionist impulses are creating a cumbersome, bureaucratic Washington DC process.
Trump has said he will allow companies to escape the tariffs if they relied upon foreign suppliers for steel or aluminum products that were unavailable in the United States in “satisfactory quality or in a sufficient and reasonably available amount.”
While the Commerce department promised decisions within 90 days, the process has bogged down amid several thousand applications for relief.
To obtain an exclusion, each steel user must fill out a lengthy Excel spreadsheet, detailing for government bureaucrats its product needs, including the chemical composition, dimensions, tensile strength, coating, magnetic permeability and global and local “ductility.”
Separate forms must be filled out and submitted for each product. Applicants must identify potential or existing domestic suppliers and — if they don’t have any — explain to the government how they determined that no U.S. producer could meet their needs.
NHK of America Suspension Components in Bowling Green, Ky., a manufacturer of suspension coil springs for automakers including Ford and Toyota, told Commerce in an April 20 filing that there has been no domestic maker of the type of steel it requires since the closure of a Republic Steel plant in Lorain, Ohio, two years ago.
Even though — thanks to Trump’s tariffs — Republic Steel plans to restart that facility this summer, it will take “multiple years” to qualify it as a new supplier, Metal One America, NHK’s importer, said in a related filing.
In the exclusions process, Commerce officials also are tasked with refereeing arcane disputes between steel companies over what specific products are and are not available in the United States.
On May 23, Nucor — the largest domestic producer — called upon Commerce to reject an exclusion bid by London-based Evraz that would allow it to import steel slab from Russia. “Evraz is requesting an exemption for approximately 1.9 million metric tons of Russian slab to be rolled into hot-rolled coil, plate in coil, cut-to-length plate, and large diameter pipe in the United States based on claims of nonavailability and national security concerns,” Nucor said in a 25-page document. “There is no merit to these claims.”
The process assumes that there are domestic sources of steel and aluminum that the Commerce Department knows about and that profit-oriented companies remain ignorant of, Lovely said. “If it was a better match to begin with, the market would have made that match,” Lovely said.
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