Trade Cases

Commerce Self-Initiates Investigation of Electrical Steel Imports

May 5, 2020

The Department of Commerce will self-initiate a Section 232 investigation into whether laminations for stacked transformer cores, stacked and wound transformer cores, electrical transformers and transformer regulators are being imported into the United States in such quantities or under such circumstances as to threaten or impair national security.

The laminates for transformers are made of grain-oriented electrical steel. AK Steel, a subsidiary of Cleveland-Cliffs, is currently the only producer of GOES left in the United States.

Cleveland-Cliffs CEO Lourenco Goncalves and several members of Congress have urged the Trump administration to review the possible circumvention of existing tariffs on GOES products.

More than two dozen members of Congress sent a letter to President Trump in April highlighting the surge of derivative electrical steel articles, including laminations and cores, from Canada and Mexico.

“The value of these imports from Canada and Mexico are up 87 percent from 2017 to 2019, indicating that approximately 43,000 tons of U.S. GOES has been displaced by this circumvention activity,” wrote the congressional members. “A stunning 95 percent of Canadian and Mexican lamination and core exports are now coming into the United States, yet there is no domestic GOES production in either Canada or Mexico.”

AK Steel has said that continued circumvention could lead to the closure of its mills in Butler, Pa., and Zanesville, Ohio, affecting 1,400 jobs.

Cleveland-Cliffs praised the Section 232 investigation by the Department of Commerce. Said Goncalves, “We are confident that this self-initiated investigation will reinforce the critical nature of ensuring a reliable domestic supply of GOES to support electric power distribution and will address the circumvention of national security tariffs involving transformer laminations and cores of GOES.”