TOKYO -- Washington has awarded exemptions for Japanese products to the U.S. steel tariffs imposed last March in just over 40% of the waiver requests made by American importers, with nearly as many cases still waiting on a decision.
About 3,900 of the roughly 9,400 applications submitted by American buyers received approval from the U.S. Commerce Department as of Feb. 22, while 2,000 were denied, according to Japan's industry ministry.
When Washington announced the additional 25% tariff on steel and 10% duty on aluminum last year, it also created a system for importers to seek exceptions for items difficult to source in the U.S. Industry players expected waivers to be granted to many high-performance Japanese steel products.
The items that have received exemptions include products such as automotive steel sheet that "must be durable and safe, and can't be made in the U.S.," a Kobe Steel representative said.
Rulings have yet to be made on roughly 3,600 applications. Though Washington intended to respond to requests within a few months, the process has been delayed, likely owing partly to the partial U.S. government shutdown between late December and January.
Even when waivers are denied, importers often buy the products anyway and pay the extra tariff, steel industry sources say. But the tariff appears to have contributed to a decline in Japanese steel exports to the U.S., with many months yielding year-on-year drops of 30% to 40%, though production problems at Japanese steelmakers are also a factor.
Worldwide, the U.S. has granted 16,000 out of 44,000 steel exemption requests. Japan is the largest beneficiary by volume, with waivers covering 1.34 million tons of steel, or about 30% of exempt imports.
About 80% of the 226 exemption requests for Japanese aluminum products also have been granted. China accounts for the largest share of aluminum shipments under waivers with more than 640,000 tons, or 25% of the total. Even amid the Sino-U.S. trade war, many American companies still use Chinese aluminum products, making a broad crackdown difficult.