The Massachusetts senator is accusing the Commerce Department of “political favoritism.”
Sen. Elizabeth Warren is accusing the Trump administration of rigging its trade wars.
On Wednesday, the Massachusetts Democrat asked the Commerce Department’s inspector general to investigate the agency’s process of granting and rejecting exemptions to the steep tariffs Trump placed on imported steel and aluminum products in March. She said the agency has made “troubling” decisions, such as granting relief to the US subsidiary of a sanctioned Russian company.
Thousands of US-based companies have asked the administration to give them a special break from the hefty 25 percent tariff on imported steel and the 10 percent tariff on imported aluminum. The tariffs were supposed to protect the US steel industry from foreign competition, as a matter of national security. But following fierce backlash from US businesses that buy steel, Commerce Secretary Wilbur Ross agreed to waive the tariffs if companies could show that the steel wasn’t readily available in the US, or if it didn’t threaten America’s national security.
The agency has since been flooded with more than 30,000 requests for exemptions, and some of the decisions suggest the administration is picking favorites.
In Warren’s letter to the inspector general, which was shared with Vox, she pointed out one particularly distressing case she came across this summer. In July, the Commerce Department had approved a tariff exemption for the US subsidiary of a sanctioned Russian metals company with ties to Russian President Vladimir Putin. Despite past objections from US steel producers, United Company Rusal was allowed to purchase 6.6 million pounds of imported aluminum, untaxed.
The Commerce Department told the New York Times earlier this month that it approved the waiver because “this product is not available from U.S. manufacturers.” It then reversed course and denied the waiver, due to a “clerical error.”
Warren also cited concerns that Mick Mulvaney, director of the White House Office of Management and Budget, was openly lobbying the Commerce Department to grant a break to a South Carolina company whose owner donated to his 2016 congressional campaign. Element Electronics, a television assembly plant, said it would need to shut down if it had to pay the tariffs.
“The Commerce Department process for making decisions that affect thousands of American companies subject to President Trump’s tariffs is failing to protect national security; it is arbitrary and opaque, replete with mistakes, and subject to political favoritism. It is therefore imperative that your office investigate this matter,” Warren wrote in the letter.
As of Monday, the administration had received 30,035 requests for steel and aluminum tariff relief. The flood of requests has prompted the Commerce Department to hire dozens of contractors to help review submissions, but the criteria for granting the waivers remain unclear. The agency has only resolved about 3,500 requests: 2,101 exemptions approved, and 1,458 denied.
Warren also expressed concerns that the US steel industry (which has close ties to Ross and others in the Trump administration) is getting too much of an advantage in deciding the outcome of these cases. She cites a New York Times report showing that the two largest US steelmakers have filed objections to 1,600 waiver requests — and that all those requests were denied.
“Thousands of companies are seeking exemptions worth billions of dollars and affect manufacturing and investment decisions nationwide,” Warren wrote. “But this process appears to be running on an ad hoc basis, with little transparency, and bending to political pressure from well-connected lobbyists and Administration officials.”
Warren asked the inspector general to analyze the process the Commerce Department uses to decide which companies get tariff exemptions and whether they are following those procedures. She also wants the office to investigate potential political interference and favoritism, and whether the tariffs are actually achieving the goal of keeping America safe.