One of President Donald Trump’s potential 2020 rivals is criticizing the administration for how it grants exemptions from tariffs on steel and aluminum imports.
The office of Sen. Elizabeth Warren, D-Mass., reviewed a sample of more than 900 steel exemption decisions made by the Department of Commerce in the first 30 days of the process and found the overwhelming majority of requests went to U.S. subsidiaries of foreign companies.
“You appear to be implementing the tariff exemption program in a way that undermines American steel producers – by allowing large tariff-free imports of foreign steel – and harms American-owned steel-dependent companies instead of improving their competitive advantage over companies headquartered in China and other foreign countries,” Warren wrote in a letter to Commerce Secretary Wilbur Ross dated Tuesday.
In a written response, the Commerce Department said Warren’s analysis “betrays a lack of understanding of the exclusion process, which was put in place to supply domestic consumers with steel that could not or would not be produced here in the United States or in an exempted country.”
Warren’s letter comes as it increasingly looks like she is gearing up for a run at the White House. The Massachusetts Democrat is one of Trump’s biggest critics – and targets. The president often insults her as “Pocahontas,” since Warren has claimed some Native American ancestry. She came under fire from some Native Americans and some liberals for announcing that a DNA test did indeed show small traces of Native American lineage. Trump also continued his attacks.
With the letter criticizing Trump’s tariff exemptions, Warren is seeking to shift the subject back to her focus on economic policy.
The tariffs were implemented under a trade law provision protecting U.S. national security. Trump hailed the move as a way to protect U.S. companies from unfair trade practices by foreign countries, especially China.
As of Oct. 29th, 43,634 steel and 5,667 aluminum exclusion requests have been filed. Overall, 15,662 steel exclusion decisions have been posted (11,281 were approved), while 905 aluminum decisions have been posted (763 approved).
Warren’s staff analyzed 909 decisions posted by the Commerce Department in the first 30 days that the responses were made available. Among the findings, foreign-headquartered companies received more than 80 percent of all exemption requests in the first 30 days. The majority of waivers, almost 52 percent went to Japanese-owned companies, and overall 84 percent of their requests were approved. The largest recipient of tariff exclusions was DS Containers, a subsidiary of Daiwa Can.
Chinese-owned companies received 27 percent of all waiver approvals through their U.S. subsidiaries, with 94 percent of their requests getting approval. ARC Automotive, a subsidiary of a China-based real estate firm owned by a Chinese investment holding company received tariffs exemptions it sought to import from Nippon Steel & Sumitomo Metal. Greenfield Industries, a subsidiary of TDC Cutting Tools, a company-based in China, also received exclusions.
By comparison, requests from American companies were granted about 25 percent of the time.
“This is utterly inexplicable and you owe the American people an answer for why, after President Trump promised that his tariff program would help American companies, the process appears to be favoring foreign-owned firms with U.S. subsidiaries over American firms by allowing them to import foreign steel,” Warren wrote.
The Commerce Department said exclusions are only granted when U.S. producers do not make the product in sufficient quantity or quality. If U.S. suppliers do not object to exclusion requests, the granting of an exclusion should not hurt domestic steel production.
The exemption process has been under fire almost since its inception. In August, the Commerce Department reversed its decision to grant Russia-owned aluminum giant Rusal, which was under U.S. sanctions, an exemption after congressional Democrats flagged the grant. Lawmakers on both sides of the aisle are calling for transparency in the process.
Commerce says it has set up a fair and transparent administrative process which determines the timing of decisions. It points to announcements of new and restarted steel and aluminum production facilities in the U.S. as evidence the tariffs are protecting national security interests
“Senator Warren should share our concern that dwindling steel and aluminum industries were a threat to our National Security as well as the communities that have relied on those industries for decades,” the Commerce Department said in a statement.
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