Who obtains political exemptions? An attention-based analysis of steel tariff exclusion requests

Abstract

AbstractIn this paper, we examine firm exclusion requests from the Section 232 tariffs placed on steel articles by President Donald Trump in March of 2018. The Presidential Proclamation that announced these new tariffs also authorized the creation of an exclusion process through which firms that use imported steel can request exemptions from the 2018 steel tariffs if no U.S. steel producer is able to supply the amount and type of steel demanded. Expanding the Attention-Based View (ABV) framework beyond the private sector, we suggest that decision-making by the U.S. Department of Commerce regarding the approval or denial of steel tariff exclusion requests is influenced by attention to elements of both domestic and international politics. Using a dataset of 163,522 exclusion requests, we find that political alignment and historical trade relationships with exporting countries significantly increase the Department of Commerce’s likelihood of approving exclusion requests. In addition, firm lobbying and the amount of steel requested for exclusion from tariffs have a significant negative impact on the likelihood of approval. This research extends our understanding of business–government interactions, incorporating not only economic and political influences but also the organizational environment, and highlights the importance of attention structures in explaining regulatory outcomes.