U.S. Reps. Mike Kelly (R-PA) and Troy Balderson (R-OH) teamed up with a bipartisan group of 23 of their colleagues in the U.S. House of Representatives to express unfair tariff concerns regarding the nation’s electrical transformer supply chain and the fate of 1,500 jobs in their home states.
Specifically, the members sent an April 15 letter to President Donald Trump about the vulnerability of AK Steel, a wholly-owned subsidiary of Cleveland-Cliffs Inc., and the only producer of grain-oriented electrical steel (GOES) in North America. AK Steel produces GOES at its mill in Butler, Pa., while finishing occurs at its Zanesville, Ohio plant.
The U.S. Commerce Department in 2018 cited national security concerns associated with GOES, which is used in the manufacturing of power and distribution transformers that sustain America’s electrical grid, according to the lawmakers’ letter.
“While relief from direct imports of GOES was imposed by your administration under the Section 232 steel tariff program, the bad actors have found a way to circumvent those tariffs and quotas,” wrote Rep. Kelly, Rep. Balderson and their colleagues. “Because the Section 232 tariffs do not apply to derivative electrical steel articles including laminations and cores (i.e., simply cut and shaped electrical steel) imports of those products are now surging into the United States.”
The members noted that “Mexico and Canada are being used as a staging ground for this blatant circumvention of the Section 232 program,” and the subsequent unfair trade practices are threatening AK Steel’s business.
“AK Steel has announced that, unless this circumvention of the national security tariffs can be stopped, it will have no choice but to idle the Butler and Zanesville plants in 2020,” the congressmen wrote. “Such an idling of these facilities would result in approximately 1,500 layoffs and the loss of America’s last electrical steel producer.”
The lawmakers urged the president to issue a proclamation that would cover the company’s steel products under the Section 232 program, and to ensure that the tariffs are applied to laminations and cores from Mexico and Canada.
“A successful resolution of this circumvention is critical to national security, the effectiveness of your administration’s Section 232 steel program, and thousands of livelihoods in western Pennsylvania and Ohio,” the members wrote.
Among the lawmakers who joined Reps. Kelly and Balderson in signing the letter were U.S. Reps. Glenn “GT” Thompson (R-PA), Pete Stauber (R-MN), Steve Stivers (R-OH), Michael Turner (R-OH), Dave Joyce (R-OH), Bill Johnson (R-OH), Guy Reschenthaler (R-PA), and Marcy Kaptur (D-OH).