ISRI: Shredder wear parts exclusion to expire at year-end

The Institute of Scrap Recycling Industries (ISRI), the Washington-based association that represents the recycling industry, has issued an alert to its members that the Section 301 tariff exclusions, including the exclusion on auto shredder wear parts, will expire at year-end. According to ISRI, it is likely that the Office of the United States Trade Representative (USTR) will not extend the exemptions as part of a larger China trade policy. Given that, ISRI says, the additional 25 percent tariff will start Jan. 1, 2023.

In 2018, the USTR determined, pursuant to an investigation under “Section 301” (Title III of the Trade Act of 1974), that China’s acts, policies and practices related to technology transfer, intellectual property and innovation were unreasonable or discriminatory and burdened or restricted U.S. commerce. Therefore, the Trump administration used Section 301 to impose four rounds of increased tariffs on about two-thirds of U.S. imports from China. The USTR, however, introduced a policy allowing stakeholders to request “tariff exclusions” for U.S. imports that would otherwise have been subject to tariffs if those tariffs would result in harm to U.S. companies.

ISRI petitioned the USTR in 2018 to allow an exemption for auto shredder wear parts, however, the association’s request was denied because it “failed to show that this particular product is available only from China,” according to a letter ISRI received from the U.S. government.

ISRI says it continued its advocacy, and the USTR granted an exemption April 18, 2019. In 2020, the government allowed companies and organizations to request continuation of the exemption for one year, and that was granted to all those that made the request.

In October 2021, when the USTR invited public comments on whether to reinstate previously extended exclusions, which included shredder wear parts, ISRI says it submitted comments explaining why the exclusion for shredder wear parts should be reinstated and how the tariff has caused economic harm to U.S. small businesses, employment, manufacturing output and supply chains.

March 23, 2022, USTR announced its determination to reinstate certain previously granted and extended product exclusions in the China Section 301 investigation retroactive to Oct. 21, 2021, extended through Dec. 31, 2022. ISRI says it “once more petitioned the USTR for an exemption for shredder wear parts since the U.S. does not produce enough of these parts for the hundreds of U.S. shredders used to process automobiles and other ferrous and nonferrous materials.” Dozens of supporting comments were filed, as well, ISRI says, and the USTR granted the exemption for these items.

ISRI says it plans to petition USTR and request the extension of the exemption and will raise its concerns on Capitol Hill. However, the association tells its members that it understands that USTR “is unlikely to consider any possible exemptions before the end of the year.” 

Additionally, ISRI says it will submit comments by Jan. 17, 2023, in response to USTR’s four-year review of Section 301 exemptions, again emphasizing the importance of the tariff exclusion on shredder wear parts.
One fewer company will be manufacturing such parts in the U.S. by year-end.

Columbia Steel Castings Co., Portland, Oregon, a U.S. manufacturer of a variety of steel and iron parts for basic industry, including wear parts for metal and waste shredders, announced its closure plans in late August. The company said the effects of offshore competition that often is government subsidized, supply chain disruptions, COVID-related restrictions on sales travel, increased state and local environmental regulations and fees on energy-intensive industries and the inability to hire and retain sufficient employees to produce castings at a sustainable level, even after substantial pay increases, have contributed to the decision to close the 121-year-old company.