Carper, Toomey, Jones on GAO Recommendations to Improve Commerce Department’s Tariff Exclusion Process

WASHINGTON, D.C. – U.S. Senators Tom Carper (D-Del.), Pat Toomey (R-Pa.), and Doug Jones (D-Ala.) issued the following statements on the Government Accountability Office’s (GAO) recommendations to the U.S. Department of Commerce on how to improve its exclusion request process and economic impact reviews of steel and aluminum tariffs:

“Unfortunately, today’s report from GAO confirms what my staff and I have heard from too many Delaware manufacturers who have been seeking relief from these misguided tariffs implemented by the Trump Administration. There have been, rightfully, bipartisan concerns about the convoluted and lengthy exclusion process that the Commerce Department created, but what is equally concerning in light of today’s report are GAO’s findings that the Commerce Department failed to apply its own review criteria consistently. Combined with concerns raised by the Commerce Department’s Office of Inspector General in October of last year regarding improper influence in the review process, these findings raise significant questions about the fundamental fairness of the exclusion process. The workers and businesses that drive our economy are already facing enough extraordinary challenges due to the ongoing pandemic. The federal government should be doing everything possible to provide more certainty and predictability for manufacturers seeking relief — not playing favorites,” said Senator Carper. “I want to thank the men and women at GAO, our government’s independent watchdog, who conducted this review. It is my sincere hope that the Commerce Department will finally conduct and publish the economic impact analysis of these tariffs that is long overdue and implement GAO’s thoughtful recommendations so as to not negatively impact American manufacturers any further.”

“Steel and aluminum tariffs, which were dubiously justified with a claim of ‘national security,’ have cost American consumers billions of dollars and the state of Pennsylvania manufacturing jobs,” said Senator Toomey. “The administration should eliminate these taxes altogether. In addition, the Commerce Department should quickly adopt GAO’s recommendations for reducing applicant errors and making exemption decisions faster. Furthermore, it’s long past time for the Commerce Department to comply with the law that required them to release the 232 auto report by January 19, 2020.”

“The GAO’s findings affirm what thousands of businesses around the country have known to be true: the administration’s rush to enact tariffs was a costly mess,” said Senator Jones. “Its tariff exclusion process stood up by the Commerce Department was quickly overwhelmed and backlogged, leading American businesses to pay tariffs they shouldn’t owe and to spend months trying to resolve their claim with the Department. While this report isn’t surprising, I hope this serves as a wake-up call for the Administration to reevaluate its tariffs that have been hurting our own economy, while failing to hold bad actors like China accountable.”

The GAO report found that the Department of Commerce failed to decide about three quarters of requests within its own timeliness guidelines from March 2018 to November 2019, including taking more than a year to decide over 800 exclusion requests; did not document the results of any economic impact reviews of the Administration’s steel and aluminum tariffs; and did not take adequate steps to reduce request submission errors that result in delayed relief for manufacturers and increased work for the agency.

Additionally, the GAO report indicated that the Department of Commerce, when deciding whether to grant an exclusion, may have given disproportionate weight to the objections of domestic producers, even if the producer did not provide evidence that they could domestically provide the needed steel or aluminum within a reasonable timeline. This finding raises significant questions about the fairness of the Section 232 tariff exclusion review process, and in addition to implementing the GAO’s recommendations, the Commerce Department should work to improve its exclusion process to better balance the interests of steel and aluminum-using manufacturers and steel and aluminum-producing manufacturers.

In December 2018, Senators Carper, Toomey, and Jones secured a commitment from GAO to review the Commerce Department’s steel and aluminum exclusion process.