WASHINGTON, D. C. — Toledo Democratic Rep. Marcy Kaptur wants the U.S. Commerce Department and U.S. Trade Representative to crackdown on imports of the electrical transformer components made with foreign-produced grain-oriented electrical steel of the sort produced by Cleveland-Cliffs.
Kaptur on Monday joined Zanesville Republican Rep. Troy Balderson, Pennsylvania Republican Rep. Mike Kelly and Pennsylvania Democratic Rep. Conor Lamb in a letter seeking relief for Cleveland-Cliffs from the imported electrical transformer parts. Cleveland-Cliffs facilities in Zanesville and Butler, Pennsylvania, are the only places in the United States that make grain-oriented electrical steel. The company has previously said it might have to shutter the nation’s last production line of key power transformer components if no action is taken.
A Commerce Department investigation completed last October found that Canada and Mexico are being used as the staging grounds to circumvent tariffs on grain-oriented electrical steel produced in China, Russia, Korea and Japan and that the imports were coming into the United States in quantities that threatened national security by undermining domestic production. No action took place on those findings in the transition between presidential administrations.
Monday’s letter from Kaptur urges the Biden Administration to “immediately address this critical transformer supply chain vulnerability.”
“We have major concerns with the unfair trade practices that have been plaguing the electrical steel market for years putting in jeopardy our last producer of this critical material in North America and the related roughly 1,400 United Auto Workers (UAW) jobs,” the letter says. “Lack of domestic capacity and dependence on imports for these transformer components puts at risk the ability to maintain and repair the existing electric grid in the face of increasingly emboldened foreign adversaries,” as well as natural disasters such as hurricanes.
The Commerce Department report identified seven non-mutually exclusive options to address the national security threat posed by the foreign steel imports. They included negotiating with Mexico and Canada to reduce imports of the transformer parts or requiring that they contain more U.S. steel, imposing tariffs or quotas on the imports, providing financial incentives to U.S. manufacturers and imposing domestic content requirements on power transformers.
“Given the national security threat identified in this report and the importance of preserving the last domestic producer of GOES (grain-oriented electrical steel), we write to request that you immediately pursue the recommended trade diplomacy with Canada and Mexico and negotiate an agreement that will reduce imports of laminations and cores made of GOES,” their letter says. “The reliability and resilience of our nation’s electric grid, and thereby our national and economic security, rely on our ability to address this serious trade irritant with Canada and Mexico.”
An earlier version of this story said the steel at issue is produced by Cleveland-Cliffs subsidiary AK Steel. After acquiring AK Steel, the company renamed its entire steel production business under the Cleveland-Cliffs brand and no longer references AK Steel.
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