WASHINGTON — Now that auto industry opponents to steel and aluminum tariffs have lost their fight, they are turning to their next battle — securing exemptions to avoid paying them.
In signing the metals tariffs into action last week, President Donald Trump signaled some flexibility toward Canada and Mexico, if they are willing to compromise on North American Free Trade Agreement negotiations, and toward nations that contribute to military alliances. His tariff proclamation — 10 percent on aluminum and 25 percent on steel — allows for an appeals process, and auto industry players intend to use it.
The Motor & Equipment Manufacturers Association is already urging the Commerce Department to provide blanket exemptions, upfront, for specialty metals imported by component manufacturers that are in short supply or unavailable from a domestic producer — criteria for exemption consideration.
Last year, the trade association provided Commerce an extensive list of steel and aluminum products that should be excluded from import restrictions to prevent harm to the auto industry. It said several foreign steel producers have worked closely with U.S. suppliers to develop specialized steel products and that the collaboration benefits the U.S. by improving products.
"These products should be excluded prior to the tariff going into effect," association leader Steve Handschuh said in a Feb. 13 letter to Trump. "Individual companies should not have to separately apply for exemptions or exclusion for these specialty products. Such a requirement would place a significant regulatory burden on the industry, particularly smaller manufacturers that lack internal trade and compliance personnel."
The association has recommended a process that would allow industry representatives, such as trade associations, to apply for exemptions on behalf of multiple member companies.
Ann Wilson, the association's senior vice president of government relations, told Automotive News that it is not only the quantity, but the quality, of steel and aluminum that is important in making certain products.
"It takes years to certify a product for use in a vehicle, to show its longevity, durability and safety," she said. "If we're not able to get enough of a raw material, it makes it difficult to make technology in the U.S."
Automakers themselves also are likely to seek exemptions, said Paul Ryan, vice president of trade and competitiveness at the Association of Global Automakers.
"There are many products that our companies procure and install in motor vehicles that can't be purchased domestically," he said.
Companies may have more success getting their appeals approved by the Commerce Department if they reach out to members of Congress or state governments to make the case about potential jobs that could be lost without tariff relief, said Nicole Bivens Collinson, president of international trade and government relations at law firm Sandler, Travis & Rosenberg, of Miami.
The exemption mechanism allows an item to be excluded from the tariffs based on a demonstrated lack of U.S. production capacity for certain types of metals or national security considerations.
An appeal process likely would require a public comment period on each request and a timetable for review.