Imported transformer parts to undergo US national security trade probe

04 May 2020 22:02

The Trump administration will investigate the national security impact of foreign-sourced materials used to make electrical transformers.

“The Department of Commerce will conduct a thorough, fair and transparent review to determine the effects on the national security from imports of laminations for stacked cores for incorporation into transformers, stacked and wound cores for incorporation into transformers, electrical transformers, and transformer regulators,” Commerce Secretary Wilbur Ross said today about the upcoming investigation authorized by Section 232 of the Trade Expansion Act of 1962, a Cold War defense trade law.

The announcement comes on the heels of a May 1 White House executive order to secure the country’s power grid, which includes electrical transformers. The order includes a ban on the importation of “bulk-power system electric equipment designed, developed, manufactured, or supplied, by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary.”

AK Steel, the only grain-oriented electric steel, or GOES, manufacturer left in the US, has been urging President Donald Trump and the White House to lodge Section 232 tariffs on imported components for transformers. GOES is used to produce the laminations and cores of transformers. Cleveland-Cliffs, which purchased AK Steel this year, warned that it could shutter the last GOES factories in the US.

“Thank you to President Trump, Secretary Ross, and U.S. Trade Representative Robert Lighthizer for hearing our community's concerns and taking action to end the unfair trade practices that threaten AK Steel's ability to continue production of electrical steel,” said US Representative Mike Kelly, a Pennsylvania Republican that has a GOES facility in his district.

Section 232 has been a signature piece of Trump’s trade policy that aims to protect US manufacturing. Currently, there are national security tariffs on foreign-sourced steel and aluminum – which have drawn plenty of criticism and litigation. The president has also used the law to examine imported uranium and titanium sponge but didn’t order tariffs.

Trump has also used Section 232 investigations as leverage in trade negotiations with the EU, Japan and Canada.

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