January 2019 - The Coalition of American Metal Manufacturers and Users (CAMMU) sent a letter Nov. 13 to Commerce Secretary Wilbur Ross, commenting on the Bureau of Industry and Security’s (BIS) Interim Final Rule related to requesting exclusions from remedies applied under Section 232 of the Trade Expansion Act of 1962.

CAMMU members include the American Institute for International Steel, the National Tooling & Machining Association, Precision Machined Products Association,  Precision Metalforming Association and the American Wire Producer Association, among others. Together, they represent 30,000 companies and a million American workers.

Revisions in the interim final rule still don’t address “significant obstacles” for those companies requesting exclusions.

All American manufacturers, whether they be a steel and aluminum producer or consumer, need certainty to make investments, hire workers and provide realistic timelines and quotes to meet customers’ demand, according to the letter authored by Washington, D.C.-based Bracewell LLP attorney Paul Nathanson.

Prior to Commerce’s updates, when objecting to a metal consumer’s exclusion request, steel and aluminum producers could simply state they have the ability or capacity to manufacture the product. “But the ability to manufacture is much different than the reality of delivering the actual materials needed on a timely basis.”

Coalition members build components and end products for manufacturers that require extensive testing for quality, safety and durability. This process can often take months. CAMMU suggests the BIS set a clear definition of “available immediately” at eight weeks, a typical lead time for specialty metals.

“American manufacturers already faced a shortage of specialty metals in the U.S., with the tariffs placing further strains on the many companies regularly receiving quotes with lead times extending to nearly one full year,” the letter reads.

“We request that [Commerce] hold organizations that file objections to the highest standards. [It] should require specificity before considering the objection, and question and verify the assertions made by the objectors or claims made in surrebuttals. U.S. consumers of aluminum and steel need definitive answers from potential suppliers and cannot manufacture a physical product based on a promise to deliver with a date uncertain.”

Objections to exclusion requests reveal “numerous vague assertions” that cannot meet the “available immediately” threshold so CAMMU asks Commerce to “reject these objections outright. For example, [metal] producers regularly disregard the process for quality and testing that [OEMs] must go through with their customers prior to acceptance of their products.”

One U.S. steelmaker filed an objection stating it has “been in trial and test phases for over one year” for a product one exemption seeker sought. CAMMU writes, “[The steelmaker’s] admission about the length of the testing process reinforces our concern over unrealistic promises made by potential suppliers.”

U.S. manufacturers recognize the difference between raw materials being readily available and those in the “process of negotiating and qualifying” the input needed, the letter states. The coalition asks Ross to have Commerce clarify whether a company has standing to file an objection over a material that they admit it does not currently manufacture.

CAMMU also says the time line for seeking exemptions and accepting and reviewing objections is far too long (106 days), even as it has nearly 50,000 requests and objections filed between the two exclusion request dockets. “A roughly three-month turnaround even under normal circumstances is often considered expedited [by the government].” But most manufacturers must produce in a just-in-time environment, “where even the slightest disruptions or delays can cause a customer to take their business elsewhere.”

No manufacturer can afford to lose so much time “waiting for a response made in a system that places greater weight to the objections raised than to the facts presented by actual purchasers of the raw materials,” the coalition asserts.

Meanwhile, it alleges that the administration’s steel and aluminum tariffs “help only a small subsection of domestic industry at the expense of the nation’s economy as a whole. The ripple effect comes via increased prices that are borne by [OEMs} or passed through to American consumers.” The coalition suggests the Section 232 tariffs on steel and aluminum be terminated or that Commerce provides a clear, transparent and expedited exclusion process for manufacturers reliant on imports to make U.S. goods. MM