Many companies, including Union Pacific, get waivers for steel tariffs amid tough trade talk

Many companies, including Union Pacific, get waivers for steel tariffs amid tough trade talk
World-Herald News Service

WASHINGTON — Despite President Donald Trump’s tough talk on trade, his administration has granted hundreds of companies permission to import millions of tons of steel made in China, Japan and other countries without paying the hefty tariff he put in place to protect U.S. manufacturers and jobs, according to an Associated Press analysis.

The waivers from the import tax show how pliable his protectionist policies can be. Trump has positioned himself as an “America First” trade warrior, using tariffs as a club against countries he’s accused of playing unfairly. Although China has been the principal target of Trump’s ire, he has also criticized Japan and American allies in Europe.

But behind the scenes, his Commerce Department approved tariff exemption requests from 370 companies for up to 4.1 million tons of foreign steel, with roughly 8 percent of the total coming from China and almost 30 percent from Japan, according to the AP’s review of thousands of applications for relief from the import tax on steel.

Omaha-based Union Pacific is the lone Nebraska company listed in the database. The company received full exemption on imports of more than 140,000 tons of 480-foot continuous rail that the company says cannot be bought in the U.S. It has an additional application pending.

Those longer sections of rail, made in Japan, help the railroad reduce the number of accidents caused by the welds that connect shorter sections of track, said Raquel Espinoza, a spokeswoman for Union Pacific.

The number of exemption requests illustrate a demand for foreign metal products even as Trump seeks to rebuild America’s steel industry by curbing imports. In imposing the 25 percent steel tariff and a separate tax on foreign aluminum, Trump justified the moves by arguing that the imports posed a threat to U.S. national security. Many trade experts have rejected that rationale as preposterous.

The Commerce Department has received waiver applications from companies in 45 states and Puerto Rico.

Tioga Pipe in Philadelphia, which supplies a variety of industrial customers with pipe, fittings and flanges, received approval to import as much as 86,500 tons of Chinese steel duty-free; that was the most of any company with approved waivers. Tioga did not return calls and emails seeking comment, but its applications indicate that the material isn’t available from domestic suppliers in the sizes and shapes it needs.

The waivers provide a window into a steel tariff exemption program that has vexed many applicants as well as lawmakers who’ve questioned the pace, transparency and fairness of the process. The flood of applications overwhelmed the system the department set up to review them, and more than 38,000 requests still await rulings.

The department declined interview requests. A spokesman said in an statement that exemptions can be approved if the department determines that the metal “is not produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality or should be excluded based upon specific national security considerations.”

Many recipients of the waivers are subsidiaries of foreign-owned businesses. Overall, the department has so far approved almost 14,000 requests for exemption from the steel duty, with 59 percent of them going to firms with a foreign corporate parent. Most of the waivers last for a year. More than 4,400 applications were denied.

Sen. Elizabeth Warren of Massachusetts, who this month declared herself a Democratic candidate for president in 2020, told Commerce Secretary Wilbur Ross in late October that giving exemptions to foreign-owned businesses “appears to be massive loophole.” The purpose of tariffs, she said, is to benefit U.S. manufacturing, not undermine it.

Warren said in a statement to the AP that Trump “claims to be implementing trade policies that put America first, but here’s what the data show: this administration is handing out special tariff exemptions to foreign-owned companies at the expense of American companies.”

But Scott Paul, president of the pro-tariff Alliance for American Manufacturing, said a company’s lineage shouldn’t be a factor in whether it receives waivers. Paul said the volume of steel exempted from the duty is small compared with the U.S. market for steel.

“You’d be hard pressed to find a bigger China trade hawk than me,” Paul said, “but I’m not overly concerned with the number of exemptions granted so far.”

World-Herald staff writer Aaron Sanderford contributed to this report.