Elizabeth Warren: Trump administration letting foreign firms skip tariffs

Massachusetts Democratic Sen. Elizabeth Warren is questioning the Trump administration's enforcement of stee...

Posted: Nov 1, 2018 12:38 AM
Updated: Nov 1, 2018 12:38 AM

Massachusetts Democratic Sen. Elizabeth Warren is questioning the Trump administration's enforcement of steel tariffs, saying that a majority of early waivers granted went to foreign-owned companies.

Companies with operations in the United States, but headquartered in Japan and China, were more likely to have their requests granted than American companies seeking relief, according to a review done by Warren's staff of more than 900 decisions made during the first 30 days that responses were made available.

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"I write to express grave concern that the majority of the first batch of exemptions your department has issued from the Trump administration's steel tariffs have gone to subsidiaries of foreign-owned companies — even though these tariffs are purportedly in place to protect American companies," wrote Warren in a letter sent Tuesday to Commerce Secretary Wilbur Ross.

In March, the Trump administration imposed a 25% tariff on steel products imported into the United States. The duties are meant to protect domestic steel producers, which the administration deems crucial to the country's national security.

But the Commerce Department also allows importers to apply for a waiver from those tariffs if they can't find a domestic supplier for the product they need. Only entities located in the United States can apply for exclusions.

Warren, a potential 2020 presidential candidate, has been one of the loudest critics of President Donald Trump and his trade policies, which are a big part of his agenda. Trump moved forward with the steel tariffs even at the cost of losing his top economic adviser Gary Cohn, who argued against them.

In a statement sent to CNN Wednesday, the Commerce Department said Warren's analysis "betrays a lack of understanding of the exclusion process."

The agency stood by its process, calling it "fair and transparent." It was established to help supply Americans with steel that could not or would not be produced in the United States, the statement said.

Greenfield Industries, which manufactures a variety of drill bits made from steel, is one of the companies that was granted a waiver from the tariffs. In one of its applications, the company said that US steel suppliers cannot meet the demand for the "high speed steel" material it requires.

Warren's letter points out that Greenfield Industries is owned by TDC, a company based in China. But according to the company's application, it has been manufacturing in the United States since 1874. Its manufacturing facility in Seneca, South Carolina, employs more than 330 people, it said.

Greenfield became part of TDC in 2009, according to the company's website.

The exclusion process has been criticized by lawmakers on both sides of the aisle, for other reasons.

"Although you promised that the exclusion process would be 'fair and transparent,' a number of Wisconsin business leaders have expressed concerns to me about the uncertainty and arbitrary nature of the exclusion process," Sen. Ron Johnson, a Republican from Wisconsin, wrote in a letter sent to Ross in August.

Many business owners say the process to apply for a waiver is lengthy and opaque. Domestic producers can try to block the request, and at first, the company asking for the exemption had no opportunity to respond to the objection. That was changed in September, months after the tariffs went into effect.

The waivers are temporary, lasting for one year. But most companies are still waiting for a ruling on their request. To date, 43,600 steel tariff requests have been filed, about 11,300 were approved and more than 4,000 were denied.

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