October 30, 2019

Commerce Department Watchdog Report Requested by Senator Warren Reveals Significant Problems with Trump Administration Steel and Aluminum Tariff Exemption Process

Senator Warren's Oversight Reveals that a Subsidiary of a Sanctioned Russian Company Received Exemptions; Finds that Most Exemptions were Going to Foreign-Owned Companies

Report Suggests Process is Neither Transparent nor Objective; Finds "Appearance that Department officials may not be impartial."

Memo (PDF)

Washington, D.C. - United States Senator Elizabeth Warren (D-Mass) released the following statement regarding a new Department of Commerce Inspector General (IG) memo alerting Commerce Secretary Wilbur Ross to troubling findings in its audit of the agency's steel and aluminum tariff exclusion program and urging the agency to take immediate action to remedy the "lack of transparency" and the "appearance that Department officials may not be impartial."

"This report confirms the Trump Administration's tariff exclusion process was rigged from the start to benefit big, well-connected, and in many cases, foreign-owned companies," said Senator Warren.

Senator Warren requested the IG review of the tariff exclusion process in August 2018 after her investigations revealed that Rusal, a subsidiary of a sanctioned Russian company controlled by Oleg Deripaska, a sanctioned Russian oligarch and a "close Putin confidant," received an exemption, and after additional reports revealed that the exemption process was replete with mistakes and appeared to be arbitrary, opaque and subject to political favoritism. Another investigation by Senator Warren found that the overwhelming majority of exemptions from President Trump's steel tariffs have gone to the U.S. subsidiaries of foreign-owned companies rather than U.S.-headquartered firms.

Senator Warren also sent a letter to the Commerce Department's Designated Agency Ethics Official about potentially serious conflicts of interest for the two most senior Commerce Department officials responsible for managing the exemption program.

The new IG review confirms those findings, concluding that the problems they identified "give the perception that the Section 232 exclusion request review process is neither transparent nor objective," and that decisions made by key officials "gives the appearance that Department officials may not be impartial ... and are potentially making decisions based on evidence not contained in the official record."

The IG discovered:

  • An "unofficial appeals process," where finalized and approved exclusion requests with no procedural errors were reconsidered "at the request of an objector."
  • The agency changed "the exclusion request form template" at the request of an objector without notifying other interested parties, "likely result(ing) in an increase in the number of exclusion requests rejected."
  • Department officials took more than 100 meetings and phone calls with interested parties - none of which were recorded, suggesting that officials were potentially "making decisions based on evidence not contained in the official record for specific exclusion requests."