Commerce Underestimated Anticipated Number of Section 232 Exclusion Requests, BIS Official Says
The Trump administration clearly underestimated the number of product exclusion requests that would be filed under the Section 232 steel and aluminum tariffs, said Deputy Assistant Secretary of Commerce for Export Administration Matthew Borman, during an April 2 Senate Appropriations subcommittee hearing on the Commerce Department’s 2019 budget request. Borman said Commerce’s prediction was based on the number of exclusion requests it received during a “steel safeguard action” taken during 2001. Borman said that about 6,000 requests were submitted then. “Obviously there turned out to be quite a few more in the current process,” Borman said, adding that Commerce has processed more than 45,000 of the estimated 85,000 exclusion requests it has received.
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Sen. Jerry Moran, R-Kan., chairman of the subcommittee, was critical of Commerce’s predicted number of requests. After the tariffs took effect, Moran said, Commerce received nearly 75,000 requests as of January, nearly six times Commerce’s predicted number of about 13,000. Moran said the low estimate led to “an increase for funding and resources to execute the President’s trade agenda.”
Under Secretary of Commerce for International Trade Gil Kaplan, who also testified at the Senate Commerce, Justice, Science, and Related Agencies Subcommittee hearing, said Commerce has to better “predict what might occur” and said it should “learn from that experience.” Borman said Commerce has hired “contractors” to help with the large workload and “made a number of process improvements,” including the option for requesters to submit rebuttals and surrebuttals to exclusion request decisions. Borman said the average wait time for a request, if it does not have an objection or rebuttal, is between 70 and 90 days. If the request does have an objection or rebuttal, Borman said, it takes “well over 100 days.”
The Trump administration is “optimistic” about a trade agreement with China, Kaplan said. Several subcommittee members expressed worries about the trade talks, including ranking member Sen. Jeanne Shaheen, D-N.H., who said she is “concerned about this administration's desire to implement tariffs on our allies under the guise of national security.”
Sen. Susan Collins, R-Maine, said the U.S.-imposed tariffs on China have damaged her state’s lobster industry. Through the first half of 2018, Collins said, Maine saw a 169 percent increase in lobster exports to China compared to the previous year. After the imposition of tariffs, Collins said, “the Canadian lobster dealers were able to step into that market and take it away.” Kaplan said Commerce is “doing everything possible to resolve the problems with China,” adding that the two countries have been negotiating “almost nonstop ... for months.” Kaplan said the talks are progressing and “I think we are optimistic about an agreement. But we know there's still a long way to go.”