WASHINGTON, D.C. – U.S. Senators Sherrod Brown (D-OH), Rob Portman
(R-OH), and Bob Casey (D-PA) sent a letter to Commerce Secretary Gina Raimondo
and United States Trade Representative (USTR) Katherine Tai to express their
concerns about the threat to domestic production of grain-oriented electrical
steel (GOES). GOES is a necessary component of our electrical grid, which is
part of our critical infrastructure and key to our national security.
The senators wrote, “…the Department of Commerce offered seven
recommendations to remediate the national security threat posed by these
imports. Of note is the first option, which suggested that the United States
negotiate with Canada and Mexico to either reduce their exports of down-stream
GOES products to the United States, or utilize more U.S. GOES in the production
of those products. We believe this option is a constructive starting point to
address the ongoing national security threat, and ask that you engage with your
counterparts in Canada and Mexico as a first step.”
Cleveland-Cliffs, the largest producer of flat-rolled steel in
North America, is North America’s only producer of GOES. Cleveland-Cliffs
employs thousands of workers in good-paying union jobs between its plants in
Ohio and Pennsylvania. In 2018, Senators Brown, Portman, and Casey
asked President Trump
to make electrical steel a priority in any Section 232 trade remedy in an
attempt to get relief for AK Steel (now Cleveland Cliffs), the last electrical
steel manufacturer in the United States. Without relief, the company warned it
might have to shut down the last production line in the entire country. In
2020, at the urging of the senators, the Department of Commerce initiated a
Section 232 investigation into imports of GOES, in which the Department found
that GOES products were “being imported into the United States in such
quantities and under such circumstances as to threaten to impair the national
security.” Since the release of these findings Commerce has not acted to address
the national security threat.
Right now, foreign countries, including Russia and China, are
shipping GOES to Canada and Mexico where it is transformed into downstream
electrical steel products which can enter the United States in circumvention of
the Section 232 tariffs. In their most recent letter, the senators requested
that Commerce start by working with partners Canada and Mexico to either reduce
their exports of down-stream GOES products to the United States, or utilize
more U.S. GOES in the manufacturing of products containing electrical steel.
Last year, Brown
fought to protect
Ohio workers by filing a bipartisan amendment with Senator Casey as well as
Senator Bill Cassidy (R-LA) to strengthen trade protections for U.S. steel
workers in the bipartisan infrastructure bill.
You can find the full text of the letter
here and below:
Dear Secretary Raimondo and Ambassador Tai:
We write to express our concerns about the threat posed to
domestic production of grain-oriented electrical steel (GOES). Since the United
States has only one remaining producer of GOES, we urge you to revisit the
findings of the Department of Commerce’s report from October 15, 2020, on “The
Effect of Imports of Transformers and Transformer Components on the National
Security” and take appropriate action before there is further damage to our
domestic production.
As Senators representing the communities where the last American
GOES is made, we have raised, for years, the threat posed by the complete loss
of manufacturing fundamental to the integrity of our electrical grid and
transformer supply chain. Therefore, we were pleased when the report was
released to the public and revealed that, pursuant to an investigation under
Section 232 of the Trade Expansion Act of 1962 into the national security
threat posed by imports of cores, core parts, and laminations, the Department
of Commerce found that these GOES products were “being imported into the United
States in such quantities and under such circumstances as to threaten to impair
the national security.”
Unfortunately, no action has been taken in response to these findings
by the Department of Commerce. Specifically, the Section 232 report found that
in 2019 over 95 percent of imported down-stream GOES products came from Canada
and Mexico, yet neither country has actual GOES production. In other
words, our two biggest trading partners are importing GOES from abroad rather
than the United States. As such, the Department of Commerce offered seven
recommendations to remediate the national security threat posed by these
imports. Of note is the first option, which suggested that the United States
negotiate with Canada and Mexico to either reduce their exports of down-stream
GOES products to the United States, or utilize more U.S. GOES in the production
of those products. We believe this option is a constructive starting point to
address the ongoing national security threat, and ask that you engage with your
counterparts in Canada and Mexico as a first step.
With 1,400 union jobs in GOES manufacturing and our national
security at stake, we believe it is vital to the national interest that the
United States take steps to retain domestic GOES production for the long-term.
We appreciate your support for American manufacturing and its relationship to
our national security interests, and thank you for your consideration of our request.
Sincerely,
###