U.S. companies' application for steel tariff exemptions has repeatedly been blocked


According to a report released by The New York Times on August 5, since May this year, U.S. companies have submitted more than 20,000 applications for steel tariff exemptions. By the end of July, the Commerce Department had rejected 639 of those requests.

It is understood that in order to minimize the impact of the 232 tariffs, the U.S. government proposed to allow companies to request tariff exemptions for any products that cannot be purchased in the United States (such as tire rods, razor blades, etc.). So far, only metal-related products have received such tariff exemptions.

On Aug. 3, Commerce Department officials said they had not approved any of the steel-related tariff exemption requests. This act was widely opposed by American society. In this regard, U.S. Secretary of Commerce Wilbur Ross said: "Whether or not to exempt tariffs should be based on consideration of the current supply and demand situation in the U.S. steel market. If the quantity and quality of a product are not sufficient to meet the current market demand, and the product of imports do not involve specific national security concerns, and we generally agree to waiver requests."

Two major U.S. steelmakers push back against tariff exemptions

An analysis report by The New York Times showed that the two largest steel manufacturers in the United States, United States Steel Corporation and Nucor Steel Corporation, played a role that could not be ignored in the process of rejecting U.S. companies' applications for tariff exemptions. Half of the refusals so far happen with the two companies raising objections, putting thousands of U.S. companies that depend on overseas steel products at great risk. But the companies insist that U.S. companies can easily get the steel they need from U.S.-based steelmakers.

Many U.S. companies pointed out that the objections raised by the two steelmakers were "simply untrue." In addition, Nucor is said to have provided funding for a documentary produced by a top trade adviser to U.S. President Donald Trump, while U.S. Steel has previously hired several senior administration officials.

"The tariffs are working. It's protecting our national security and stimulating domestic steel production. We should be able to compete with any steel maker in the world," said John Ferriola, chairman, CEO and president of Nucor Steel. We cannot compete with those who are dumping cheap steel products into our market at prices below our production costs.”

Last month, Nucor Steel reported its second-quarter earnings, the highest since the company was founded. U.S. Steel also said steel prices and corporate profits have risen sharply since the implementation of the Section 232 tariffs.

U.S. steel users harmed

"Tariffs have had a huge positive impact on our steel industry," Trump tweeted on August 4.

Companies that were denied tariff exemptions disagreed.

Joel Johnson, CEO of Turkish steel pipe maker Borusan Mannesmann U.S., said the company's application for tariff exemptions was rejected by the U.S. Department of Commerce after opposition from U.S. Steel and others. Johnson pointed out that the company had planned to build a new factory in Texas, which would create more than 170 jobs. But for now, the plan appears to be on hold.

Robert Miller, chairman and chief executive of Novolipetsk Steel America, which imports large quantities of steel from Russia, said the company's requests for exemptions have always met with opposition from U.S. Steel and Newark.

"Currently, domestic steel suppliers in the United States are unable to adequately supply tin-plated steel sheets to meet the needs of the US market, and have no plans to increase production. However, we have submitted 70 applications for tariff exemptions to the US Department of Commerce, and only 8 The waiver application was approved. The U.S. Department of Commerce wants to maximize the market advantage of local suppliers.” said Shaker, vice president of American Crown Cork Sealing Wax Company.

Some critics point out that processing the flood of requests for tariff exemptions has overwhelmed Commerce Department staff, who do not have the resources to sift through the thousands of requests and objections and make accurate judgments. The approach they are taking so far is largely listening to the opinions of the big U.S. steelmakers.

According to internal data from the American Chamber of Commerce, the United States will lose more than 600,000 jobs due to the 232 tariffs. In response, U.S. business leaders said the interests of U.S. retailers, farmers, auto workers, etc. are at risk.

"An enemy of the whole world" was "bombed"

In addition to widespread opposition in the United States, the Trump administration has been facing inquiries from various countries for months. The current situation of the United States is well described by a sentence from Al Jazeera: "The enemy of the whole world is cutting itself off from the world."

The British "Independent" said that the United States has always been the biggest beneficiary of free trade, but now the Trump administration is getting farther and farther away from free trade.

The "Nihon Keizai Shimbun" reported that the trade war provoked by the United States will bring huge downside risks to the global economy.

Recently, Canadian Foreign Minister Christia Freeland said that the Canadian government is considering a subsidy program for the country's steel and aluminum industries. Canada has already imposed tariffs on C$16.6 billion worth of U.S. exports in retaliation for U.S. steel and aluminum tariffs, and will question the U.S. under NAFTA and World Trade Organization rules.

Mexico said it would file a complaint with the World Trade Organization over the U.S. tariffs on steel and aluminum. The European Union and Canada have filed separate complaints with the World Trade Organization after the United States announced tariffs on imported steel and aluminum products.

Norway's foreign ministry said in a statement that Norway had submitted a request to the World Trade Organization for consultations on the U.S. imposing high tariffs on imported steel and aluminum products. If the consultations fail, Norway can ask the World Trade Organization to set up an expert group to hear the case.

Earlier, the Swiss Federal Ministry of Economic Affairs issued a communiqué saying that Switzerland had filed a complaint with the World Trade Organization's dispute settlement mechanism over the high tariffs imposed by the United States on its steel and aluminum products. If the United States does not settle the complaint within 60 days, Switzerland can escalate the complaint after the deadline.