Government watchdog warns that Trump administration's tariff exclusion process appears tainted by 'improper influence'
- An internal government watchdog faulted the Department of Commerce for its lack of transparency on the Trump administration's tariff exemption process, saying it raises the appearance of "improper influence" in the agency's decision-making.
- In a memo published Wednesday, the Commerce Department's Office of the Inspector General said it found evidence of the existence of an unofficial appeals process and the agency may have been influenced by undocumented discussions with stakeholders.
- "We believe these issues give the perception that the Section 232 exclusion request review process is neither transparent nor objective," the OIG said, referring to a provision allowing the administration to impose tariffs for national security interests.
- Importers, however, have complained the process is opaque and favors larger companies that can thwart exemption requests put forward by smaller ones.
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An internal government watchdog faulted the Department of Commerce for its lack of transparency on the Trump administration's tariff exemption process, saying it raises the appearance of "improper influence" in the agency's decision-making.
In a memo published Wednesday, the Commerce Department's Office of the Inspector General said it found evidence of the existence of an unofficial appeals process and the agency may have been influenced by undocumented discussions with stakeholders.
In one instance, one unidentified business's objection to an exemption request "prompted a change in the internal review criteria" that was not communicated to the entity making the initial appeal,
"We believe these issues give the perception that the Section 232 exclusion request review process is neither transparent nor objective," the OIG said, referring to a provision in the Trade Expansion Act allowing the administration to impose tariffs for national security interests.
The memo noted there were omissions when it came to the department's handling of exemption requests.
"Of the more than 100 meetings and telephone conversations between Department officials and interested parties that we examined for the period March 1, 2018, through March 31, 2019, none had an official record of the subjects discussed during the meeting," the report said.
In a statement, a Department of Commerce spokesperson told Business Insider steps have been taken to smoothen the exemption process, which includes "hiring dozens of contractors, adding an online portal for requests, and incorporating a robust rebuttal process."
"Moreover, the Department plans to further improve transparency with industry in order to provide a level playing field for domestic producers," the spokesperson said.
Companies can request exemptions from the steel and aluminum tariffs that President Donald Trump imposed last year, but they must first prove they can't get the product they need in the United States. CNN reported that 60,000 requests have been approved and 20,000 have been denied to date.
Importers, however, have complained the process is opaque and favors larger companies that can thwart exemption requests put forward by smaller ones. Secretary of Commerce Wilbur Ross changed the system late last year to give small companies additional time to respond to objections.
The New York Times reported last year that two of the nation's largest steel manufacturers successfully derailed hundreds of exemption requests for American companies that relied on products like imported pipes, screws, and wire for their supply chains.