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“Section 232” Steel and Aluminum Tariffs

President Trump announced in April 2017 that his Administration would study the effects of steel and aluminum imports on the national security of the United States.

Section 232 of the Trade Expansion Act of 1962 allows for such reviews. Although the President intended for a swift result, an imbedded process for public comment and consultation meant that the final report took longer. On March 8, President Trump announced that the result of the Section 232 investigation will lead to an imposition of 25 percent tariffs on steel imports and 10 percent on aluminum imports. The tariffs were put in place on March 23. Also, the U.S. Department of Commerce published, on March 18, guidelines for requests for exclusion from the tariffs for steel and aluminum.                          

  • The Secretary of Commerce will grant exclusions, if:

    “if the steel and 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.” 

    …also announced was a process for submitting objections to another party’s exclusion request. 

  • Greater detail about the process is outlined in the Federal Register Notice, but here are a few key points:
    • Only individuals or organizations using steel or aluminum articles included in the 232 orders used in business activities (e.g., construction, manufacturing, or supplying to steel and aluminum users) in the United States may submit exclusion requests;
    • Separate exclusion requests must be submitted for each distinct type and dimension of product to be imported;
    • Companies submitting objections to another company’s exclusion request must provide specific information on the “like” product that the company can provide; and
    • the total processing time will be 90 days: 30 days for public comment and 60 days for review and vetting.
  • Congressional Republican leaders are worried about the effects of these tariffs on the broader economy…
    • …especially as they are fresh off the completion of tax reform;
    • …there are several legislative proposals to eliminate the tariffs, but they lack the 2/3 majority votes to override a possible Presidential veto; and
    • …there is a worry that the process will be too onerous for small companies, in particular, especially as there is no guarantee of a refund of the tariffs paid in the interim between the President’s order and if/when an exclusion is granted.

       

  • Congressional Democrats, particularly those with rustbelt constituencies, applauded the President’s decision.
  • ISRI experts conducted a webinar on March 16 to advise on our expectations for the effects of the 232 tariffs on the scrap recycling industry.

Why it’s important: Scrap recyclers would be wise to consider the impacts, both positive and negative, that the steel and aluminum 232 decisions may pose to their businesses, and act as they see fit.

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