Hours before U.S. President Donald Trump’s 232 tariffs on steel and aluminum imports went into effect, his Administration announced temporary exemptions for several American allies, including Canada, Mexico, Brazil, Argentina, South Korea, the European Union, and Australia, which collectively account for 63% of U.S. steel imports.

But one trading partner important to the U.S. fastener industry was missing: Japan, which manufactures high-end, safety critical stainless steel not made anywhere else in the world, according to the Industrial Fasteners Institute’s Washington representative Jennifer Baker Reid.

“That initial round of exemptions was helpful to the domestic fastener industry,” Reid told FIN. “However, in that March 22 proclamation, it states that unless the President issues another proclamation, those allied exemptions expire May 1.”

Without a new proclamation, those countries have until May 1 to work out individual deals to avoid the 25% tariff on steel and 10% tariff on aluminum. It appears that South Korea has successfully struck a deal, at least in principle, to gain a tariff exemption. The World Trade Organization has announced that China, the EU, India, and Russia also have requested consultations with the U.S. regarding the 232 tariffs, SteelOrbis reports.

“The May 1 deadline makes fastener manufacturers uncomfortable,” Reid stated. “If you get your steel from an exempted country, you’ve had a brief reprieve, but if that expires on May 1, you’re back to relying on an exclusion from the U.S. Department of Commerce.”

While hundreds of exclusion requests have been filed, according to Regulations.gov, fewer than 50 have been made available for public comment. Once public, domestic steel manufacturers have 30 days to file an objection.

“This is an incredibly burdensome process, and Commerce is incredibly behind,” Reid told FIN.

For example, one IFI member filed an exclusion request on March 27, but that request has not been posted as a public document yet, so the “clock” for that 30-day comment period has not begun to tick, she explained.

“If a fastener manufacturer is granted an exclusion, that exclusion is retroactive to the date the request was publicly published,” Reid told FIN.

Further complicating the process is the fact that each exclusion request is specific to a single fastener manufacturer instead of a broader product category.

“Why wouldn’t you exclude all of that product instead of individual companies?” Reid puzzled.

And fastener manufacturers don’t know what the domestic metals industry’s strategy will be toward exclusion requests.

Reid recalled that when President George W. Bush ordered steel tariffs in 2002, the domestic steel industry routinely insisted it could make many of the products subject to exclusion requests, although steel producers had little interest in actually manufacturing many of those products. Despite that contradiction, U.S. fastener manufacturers suffered under the Bush tariffs until the World Trade Organization ruled that the duties violated global trade practices.

With the Trump tariffs, the Commerce Department could potentially deny an exclusion request based on a single domestic steel producer objection.

“We have tried to explain to Commerce that capacity does not automatically mean orders,” Reid stated.

In fact, the IFI has been trying for more than a year to convince the Trump administration against implementing a steel tariff, which ultimately were rationalized 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 IFI is part of the Coalition of American Metal Manufacturers and Users, which opposes the 232 tariffs under the slogan,“Tariffs are Taxes.”

“Domestic prices are rising (significantly more than 25%),” Reid told FIN. “That’s a problem.”

There is no question that U.S. fastener manufacturers are experiencing price increases no matter where they buy their material, Reid noted.

“The longer domestic raw material prices are higher, the more likely OEMs will start sourcing fasteners elsewhere.

“Once you lose that business, it’s hard to get it back.”

The fastener industry can contact members of Congress, the White House (email the President from WhiteHouse.gov or tweet President Trump @realDonaldTrump. Or click here to sign an online petition.) Web: IndFast.org