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GOP, Democratic Senators Decry ‘Serious Flaws’ in Execution of Trump Trade Policy

Commerce Department is struggling to keep up with volume of petitions seeking relief from tariffs

By Jacob M. Schlesinger Updated June 20, 2018 7:29 p.m. ET 70 COMMENTS
https://www.wsj.com/articles/gop-democratic-senators-decry-serious-flaws-in-execution-of-trump-trade-policy-1529525574

WASHINGTON—Republican and Democratic lawmakers on Wednesday criticized the Trump administration’s attempts to implement its new “America First” trade policy, saying they have been flooded with complaints by small business constituents confused by the system used for implementing new tariffs on imports.

“The process has had, in my opinion, many serious flaws, and problems continue to surface,” Utah GOP Sen. Orrin Hatch told Commerce Secretary Wilbur Ross at the opening of a Senate Finance Committee hearing called to scrutinize the way the administration has carried out the series of tariffs it began implementing earlier this year.

“American small businesses believe they are being held hostage in a bureaucratic twilight zone waiting to see if they will escape,” Oregon Democratic Sen. Ron Wyden said. “Every single member of this committee is hearing from small business…Every week it seems to me there is more and more bedlam.”

Many lawmakers have raised concerns over the past few weeks about the potential fallout from the administration’s attempts to wrest concessions from trading partners by imposing tariffs on a wide range of goods, warning of higher import prices and exports lost because of retaliation by other countries.

But Wednesday’s hearing shone a light on a separate, emerging complaint: confusion about the process for carrying out the tariffs that have been announced, and the uncertainty that has cast over affected companies.

The bulk of the complaints focused on tariffs that President Donald Trump imposed recently on imports of steel and aluminum, arguing that the moves were necessary for national security, by ensuring a certain level of domestic production of the metals. The policy included a process for steel and aluminum users to petition for exclusions from those tariffs if they could show the specialty products they use weren’t available from domestic suppliers. It is that process—run by Mr. Ross’s Commerce Department—that has drawn widespread business and political grumbling.

In his testimony, Mr. Ross played down the problems, asserting that “we’re making very good progress” in handling the requests given “the magnitude of the chore.”

Still, Mr. Ross provided to the committee data indicating his agency is struggling to keep up with volume of petitions seeking relief. He said the department had received more than 20,000 requests for exclusions since the tariffs were first announced in March, and has so far posted just 9,000 for public comment and review. Of those, he announced Wednesday that only 98 have so far received a final ruling from Commerce officials—42 have been granted exclusions from the tariffs, while 56 have been rejected.

And in a nod to the complaints, Mr. Ross also said that Commerce had made “progress in reforming and improving the process” and would be “accelerating the processing of exclusions.” But he said that once officials do manage to review the stacks of requests, he expects most will be rejected: “there is a high probability that relatively few of those will be granted—many have no substance…and have well-grounded objections posted against them.”

The irritation was evident in the House as well. Texas Republican Rep. Kevin Brady, who chairs the Ways and Means Committee which oversees trade policy, told reporters Wednesday afternoon, he was also “terribly frustrated” by the Commerce Department’s process. He said that the 42 approvals announced by Mr. Ross “is such a small fraction of the legitimate applications….The Commerce Department process has to improve dramatically and immediately.”

On the Senate side, some committee members turned the hearing into a chance to plead a special case on behalf of specific constituents. Kansas Republican Pat Roberts said a small agriculture-equipment maker in his state was dependent on steel from Canada and couldn’t find the same materials in the U.S. “It’s a very cumbersome and slow exclusion process,” Mr. Roberts said. He asked Mr. Ross to call the owner personally, saying “If you could move him to the top of the list, that would be great.”

“I promise you, I’ll call him no later than tomorrow morning,” Mr. Ross said.

That exchange later drew a rebuke from Missouri Democratic Sen. Claire McCaskill, who said “there’s something very wrong with people on this committee being able to jump the line, to have you call someone in Kansas.”

“It sounds to me like we’ve got a government-run mercantilist economy, as opposed to a free-market economy,” Iowa Republican Sen. Chuck Grassley said after hearing Mr. Ross describe the process of sifting through all the requests.

—Richard Rubin contributed to this article.

Write to Jacob M. Schlesinger at [e-mail]

https://www.wsj.com/articles/gop-democratic-senators-decry-serious-flaws-in-execution-of-trump-trade-policy-1529525574