[blockquote style=”2″]“It’s caused us major, major chaos,” Dexter Fastener Technologies VP Jim Cremering told The Detroit News. “We got exemptions for some, but not others. It doesn’t make sense.”[/blockquote]

Nearly a year ago, U.S. President Donald Trump imposed 25% tariffs on steel imports and 10% on aluminum imports, placing additional burdens on U.S. companies that make items from steel, including fastener manufacturers.

The tariffs were justified after the Commerce Department reported that steel and aluminum imports “threaten to impair the national security,” as defined by Section 232 of the Trade Expansion Act of 1962.

The first few months after the tariffs were imposed were often chaotic for U.S. companies attempting to win exclusions from the duties. Even now, the decision to grant or deny exclusions seems arbitrary to many companies struggling with the process.

“It’s caused us major, major chaos,” Dexter Fastener Technologies VP Jim Cremering told The Detroit News. “We got exemptions for some, but not others. It doesn’t make sense.”

The manufacturer had 21 of its steel tariff waivers denied, while 15 were approved, according to Cremering. Another 25 still are being processed, but all requests are for Japanese steel wire of different grades and dimensions that mainly is used to make automotive engine fasteners, The Detroit News reports.

Meanwhile, the tariffs increased Dexter Fastener’s material costs by 3-4% and forced the company to “invest time in meeting with customers such as Ford Motor Co., Honda Motor Co. Ltd. and Nissan Motor Co. Ltd. to negotiate reimbursements for the increased costs.”

The Commerce Department has approved tariff exemption requests from 370 companies for up to 4.1 million tons of foreign steel, with roughly 8% of the total coming from China and close to 30% from Japan, according to an Associated Press analysis. Many recipients of the waivers are subsidiaries of foreign-owned businesses.

Overall, the department has approved nearly 14,000 exclusion requests, with 59% going to firms with a foreign corporate parent, according to AP. More than 4,400 applications were denied.

The numbers “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,” according to AP. “The flood of applications overwhelmed the system the department set up nearly a year ago to review them, and more than 38,000 requests still await rulings.”

The Commerce Department has received waiver applications from 45 states and Puerto Rico. The requests are posted online to allow third parties to file objections — “even from competitors who have an interest in seeing a rival’s bid rejected.”

The two most prolific protesters are steel producers Nucor and U.S. Steel, which have filed more than 5,800 objections between them, according to numbers compiled by the office of Rep. Jackie Walorski, an Indiana Republican opposed to the steel tariff. Her data also shows requests that trigger objections are rarely approved.

In its exclusion requests, Indiana Automotive Fasteners said “only Japanese-made steel meets the exacting requirements for the bolts, nuts and screws it produces for the country’s largest automakers,” AP reports. “Yet only 43 of its requests were approved while more than 100 were rejected on the grounds they weren’t completed properly.”

Nearly 150 requests are pending.

Although the company is permitted to refile the rejected requests, sales VP Mark Vance said Commerce Department officials couldn’t tell him what should be modified the second time around, leaving him to conclude the denials were due to the “subjectivity on the part of the person reviewing” the applications, according to AP.

At the same time, Nachi America, in Greenwood, IN, received nearly 530 waivers for metal that included a heat-treated steel bar made in Japan with a “precision straightness” that U.S. suppliers can’t match, according to one of the company’s applications.

U.S. steel users have warned against the 232 tariffs.

Dated February 22, 2018, the IFI letter warned against a tariff on steel.

“In our view, the negative effects on downstream consumers of steel and aluminum far outweigh any benefits that may be afforded to the domestic metals industry,” the Industrial Fasteners Institute stated in an official letter to the White House. “Specifically, we suggest that the negative impacts from these remedies will do more harm than good to our economy and national security than they will provide benefits to the domestic metals producing industries.”

The IFI joined 14 other trade associations representing over 30,000 US steel-using manufacturers to warn that the entire U.S. steel supply chain “will be damaged by restrictions on steel imports.”

The last time the U.S. imposed a global tariff on imported steel was in 2002 under President George W. Bush. The 30% tariff ended the following year after the WTO ruled the Section 201 remedy violated global trade practices. According to one independent study, the 2002 Bush steel tariffs cost 200,000 jobs because of higher steel prices.