WASHINGTON – Congressman Troy Balderson (R-OH) is commending the U.S. Department of Commerce’s self-initiation of an investigation into whether imported grain-oriented electrical steel (GOES) poses a national security threat. This investigation will be critical in assessing whether foreign manufacturers of GOES circumvent Section 232 tariffs by manufacturing the product overseas before shipping it to Mexico or Canada for minimal finishing alterations. This circumvention poses a significant threat to the last remaining American producer of GOES, Cleveland-Cliffs subsidiary AK Steel.
“If AK Steel’s manufacturing of electrical steel is edged out by importers who dodge tariffs and undercut prices, not only will Ohioans lose their jobs, but the integrity of the American electrical grid will be in peril,” said Balderson. “We cannot allow our critical infrastructure, including our electrical grid, to be completely reliant on and susceptible to harm by foreign manufacturers.”
As the congressional representatives for AK Steel’s only two GOES plants in Zanesville, OH and Butler, PA, Congressmen Balderson and Mike Kelly (R-PA) sent a letter to President Trump in March urging him to correct this oversight that allows for the circumvention of Section 232 tariffs by foreign GOES manufacturers. Since taking office, Balderson has worked with AK Steel to spotlight the threats this poses to Ohio jobs and national security: in November, Balderson and Kelly sent a similar letter to U.S. Trade Representative Robert Lighthizer; and last month, Balderson and a bipartisan group of two dozen colleagues again urged President Trump to correct this oversight.
In a release, Cleveland-Cliffs Chairman, President, and CEO Lourenco Goncalves said, “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. Cleveland-Cliffs greatly appreciates the bipartisan leadership of Senator Rob Portman (OH), Senator Bob Casey (PA), Senator Sherrod Brown (OH), Congressman Mike Kelly (PA), Congressman Troy Balderson (OH), Congresswoman Marcy Kaptur (OH) and other Congressional leaders who helped facilitate this path forward, as well as the great support from our Union partners with the United Auto Workers. The integrity of America’s electric grid and over 1,400 family- sustaining jobs at AK Steel’s Butler Works in Pennsylvania and Zanesville Works in Ohio depend on speedy resolution of this investigation.”
A loophole in Section 232 tariffs under the Trade Expansion Act of 1962 undermines American manufacturing by allowing foreign makers of GOES to produce the steel almost entirely overseas, then ship it to either Mexico or Canada where it is minimally altered before importation into the U.S., thereby allowing foreign producers to forego tariffs. Since this loophole was discovered, a dramatic increase in minimally altered GOES such as laminations, cores, and core assemblies from China and other foreign agents have circumvented Section 232 tariffs by passing through Mexico and Canada.
In March, Goncalves testified before the Congressional Steel Caucus, of which Balderson is a member, that AK Steel would be forced to shut down its GOES manufacturing if this oversight was not corrected.