Commerce Secretary Wilbur Ross Confirms Investment in Tariff Exempt Company

Commerce Secretary Wilbur Ross announced he initiated a so-called Section 232 investigation on auto trade, which would provide the legal basis to impose tariffs if his department finds imports threaten US national security
AFP

A spokesperson for Commerce Secretary Wilbur Ross confirmed in a statement to Fox News host Steve Hilton that Ross invested in a shipping firm involved in importing steel from South Korea, which received an exemption to tariffs imposed by the Trump administration. The conflict of interest was first exposed in a report by the Government Accountability Institute.

The statement provided to Hilton confirmed that Ross owns an interest in Nautical Bulk Holdings, an international shipping company. Import records show that 55 percent of shipments carried by Nautical Bulk since May 2016 consisted of South Korean steel. South Korea, the third largest exporter of steel to the US, was granted an exemption to the Trump administration’s 25% tariff on steel and aluminum in earlier this year. The Commerce Department is responsible for Section 232 investigations, the power under which the steel tariffs were implemented.

Despite the Commerce Department’s direct role in these discussions, the Office of Government Ethics allowed Ross to keep his stakes in several international shipping companies, including Nautical Bulk Holdings, after assuming office in March 2017. Ross’s spokesperson claimed that tariff investigations and trade negotiations have no “direct and predictable impact” on the Commerce Secretary’s assets, “the legal standard” for conflicts of interest. Nonetheless, records show that nearly 92 percent of the total imports carried aboard Nautical Bulk’s ships since May 2016 consisted of steel products targeted by the recent tariffs.

Ross retains ownership of Starboard GP Limited, an entity through which his investment firm manages its joint ventures with the partners behind Nautical Bulk Holdings. His financial disclosure values the secretary’s stake in one of Starboard’s underlying entities at between $5 million and $25 million. Additionally, Starboard GP is entitled to a larger share of the fund’s profits once the its returns pass a certain threshold. The spokesperson described Ross’s interest as “a small percentage stake” in the fund behind Nautical Bulk.

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