Businesses that import steel and aluminum continue to face higher costs of raw materials due to the Section 232 tariffs. In theory, importers have been able to appeal to the U.S. Department of Commerce for an exclusion from the tariffs. In practice, many importers have found that the process has been inconsistent, confusing, and unfair.
On January 25, 2021, the U.S. Department of Commerce released the findings of its investigation into the tariff exclusion process. Those findings only confirm that those who were denied exclusions faced an unfair process. Specifically, the Inspector General found:
- U.S. Companies were denied exclusion requests based on incomplete and contradictory information, and
- the Section 232 exclusion request review process lacked transparency.
In the wake of these findings, companies should consider renewing previously denied exclusions or bringing a legal challenge to previously denied exclusion requests. Such efforts are starting to show promise - one importer has recovered $97 million in tariffs it paid after its exclusion request was wrongfully denied.
Any company that imports steel or aluminum should contact its counsel to determine whether it can seek a new exclusion or bring an administrative challenge to a previously denied exclusion. Such companies should also consider whether litigation is in order. The litigation process for challenging the denial of a Section 232 tariff exclusion is guided by the Administrative Procedures Act and must be brought in the United States Court of International Trade.
Michael Best and Michael Best Strategies are uniquely situated to guide companies through both the regulatory process and the litigation process.
For more information contact Joe Olson with Michael Best or Mike Dankler with Michael Best Strategies.