‘Companies are going to get screwed’: US businesses are trying to get exemptions from Trump’s tariffs, and the process sounds like a mess

U.S. President-elect Donald Trump looks on as Wilbur Ross departs after their meeting at Trump National Golf Club in Bedminster, New Jersey, U.S., November 20, 2016

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U.S. President-elect Donald Trump looks on as Wilbur Ross departs after their meeting at Trump National Golf Club in Bedminster, New Jersey, U.S., November 20, 2016
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REUTERS/Mike Segar

  • US companies can request exemptions to President Donald Trump’s steel and aluminum tariffs if they can’t find metals domestically.
  • US businesses have filed more than 20,000 exemption requests, according to Commerce Secretary Wilbur Ross.
  • The Commerce Department has ruled on fewer than 100 of those requests.
  • According to a new report, the Commerce Department’s exemption process sounds chaotic and random.

US business are scrambling to save their businesses from President Donald Trump’s new steel and aluminum tariffs, but a huge backlog is leaving many of those companies in potential peril.

Under Section 232 of the Trade Expansion Act, the law the Trump administration is using to impose the tariffs, companies can request exemptions if there is no way for them to get the goods they need from a domestic metals producer.

But the Commerce Department, which tasked with handling these requests, is struggling to keep up.

Commerce Secretary Wilbur Ross confirmed in a hearing Wednesday that the department has so far received over 20,000 requests for product exemptions. He said 98 of those requests were processed so far – 42 exemptions were approved, while 56 were denied.

Ross blamed the snail’s pace on the lack of funding for the department. A report from The Washington Post’s David Lynch paints the issues as much deeper.

Officials in the department say there are not enough employees to handle the sudden influx of requests. And employees in the department do not have the expertise to handle such requests, the Post reported.

“It’s going to be so unbelievably random, and some companies are going to get screwed,” a senior Commerce Department official told The Washington Post. “These people are making multibillion-dollar, unbelievably uninformed decisions.”

Every company requesting an exclusion must do so for each good they want to make and each type of metal they need. That means the firms are making highly technical cases relating to hyper-specific types of steel and aluminum. The concern, according to the Post, is that Commerce Department officials evaluating these requests have little expertise and even less time to make accurate judgments.

Ross was repeatedly taken to task over the exemption process during the Senate Finance Committee hearing on Wednesday, as frustrated members of the committee ripped into Ross.

“America’s small businesses believe they are being held hostage in a bureaucratic twilight zone waiting to see if they’re going to escape,” said Sen. Ron Wyden, the highest-ranking Democrat on the committee.

Sen. Claire McCaskill, a Democrat from Missouri, was even more blunt.

“In a chaotic and frankly incompetent manner, you’re picking winners and losers on a very technical basis… without a great deal of training,” McCaskill said.

She also pointed out that the Commerce Department is requiring businesses to file the exemption requests every year.

The ire was also bipartisan, as GOP Sens. Pat Roberts and Pat Toomey related stories of companies in their states trying to get exemptions before the tariffs cause too much damage.

Ross said that the Commerce Department was “working through the backlog” of exemption requests and disputed claims that the process was chaotic.