Requests For Exclusions From The President's Steel Tariff Decision

As is well known, President Bush has announced imposition of the most protectionist tariffs since the end of World War II on imported steel. The tariffs are up to 30 percent of the entered value of steel. Coupled with the tariffs (and a tariff rate quota or TRQ on steel slabs) is a provision for "product exclusions."

Pending/New Product Exclusions

Some 800 product exclusion requests, generated by the initial ITC Section 201 investigation, were not processed prior to the March 5 announcement by the president. Confirmation has just been received that the administration will entertain new product exclusion requests. Exclusions must be requested by steel users; trade associations, such as the PMPA, cannot apply for exclusions. Accordingly, it is important for steel using manufacturers to prepare and file exclusion requests to protect your ability to obtain the competitively priced steel that you need to remain competitive in world markets.

Criteria

While the Office of the U.S. Trade Representative had published detailed instructions for submitting exclusion requests under the original Section 201 investigation, the president's proclamation of March 5 does not provide any standards or criteria for these additional exclusion requests. Until a better source is available, we recommend that the following information be submitted with any exclusion request:

1. The designation of the product under a recognized standard or certification (for example: ASTM, DIN), or the commercial name for the product and the Harmonized Tariff Schedule (HTS) number under which the product enters the United States;

2. A description of the product based on physical characteristics (for example: chemical composition, metallurgical properties, dimensions, surface quality) so as to distinguish the product from products for which exclusion is not sought;

3. The basis for requesting an exclusion;

4. The names and locations of any producers, in the United States and foreign countries, of the product;

5. Total U.S. consumption of the product, if any, by quantity and value for each year from 1996 to 2000, and projected annual consumption for each year from 2001 to 2005, with an explanation of the basis for the projection;

6. Total U.S. production of the product for each year from 1996 to 2000, if any; and

7. The identity of any U.S.-produced substitute for the product, total U.S. production of the substitute for each year from 1996 to 2000, and the names of any U.S. producers of the substitute.

A key issue is No. 3 (the basis for the exclusion request). From reviewing the 150 exclusions that were listed in the proclamation, we can get some idea of the arguments that may prevail. Steel may be "unavailable" domestically under a variety of circumstances. If you can establish one or more of the following situations, then an exclusion request may be appropriate:

1. Is the steel you need unavailable at all from domestic suppliers?

2. Is the steel you need subject to qualification requirements by you or by your customers? Is there no domestic steel producer that is on the approved supplier list for this product?

3. Have you been placed on allocation or been told that allocation of steel supplies is possible or probable?

4. Is a significant contract in jeopardy because escalating steel prices have caused your customer to look to foreign competition for supply of the same or similar merchandise?

5. Did you or a supplier or customer file an exclusion request already for this product?

How to File

DO NOT MAIL your exclusion requests. FAX them to the Assistant Secretary of Commerce for Import Administration using the following information:

Faryar Shirzad
Assistant Secretary for Import Administration
U.S. Department of Commerce
14th & Constitution Avenues, N.W.
Washington, D.C. 20230
TEL: 202-482-1780
FAX: 202-482-0947
(DO NOT MAIL)

We will continue to consult closely with the Department of Commerce and the U.S. Trade Representative about the procedures for exclusion requests on behalf of PMPA and industry members. If you have particular questions or concerns, please contact PMPA.

Coordination

PMPA will be maintaining a list of all product exclusion requests submitted by members of the precision machined products industry; please fax or e-mail a copy of your exclusion request to PMPA.

NOTE: PMPA will assist companies requesting product exclusions. However, we cannot represent individual parties requesting exclusions. Each company should retain counsel, as needed, for the purpose of filing and pursuing the individual exclusion requests.