U.S. Senators Rob Portman (R-OH), Sherrod Brown (D-OH), and Bob Casey (D-PA) today urged President Donald Trump to make electrical steel a priority in any Section 232 trade remedy.
Trump announced March 1 he would levy penalties of 25 percent on steel and 10 percent on aluminum imports. He had been weighing protective trade action under a rarely used “Section 232” of the U.S. trade law, which allows for restrictions on imports to protect national security.
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As currently constructed, Butler County-based AK Steel, the last electrical steel manufacturer in the United States, is unlikely to fully benefit from the remedy proposed by the president, according to a statement issued today by Portman’s office.
“If the company doesn’t get relief, they may have to shut down the last production line in the entire country of grain-oriented electrical steel, which is a key component of the power transformers that make up our critical infrastructure,” reads the statement.
AK Steel, which employs 9,200 people at manufacturing operations across seven states, as well as in Canada and Mexico, has a grain-oriented electrical steel production line in Butler, Penn., and a finishing line in Zanesville.
The company is Butler County’s third-largest employer with a total of approximately 2,400 full-time employees at its Middletown Works and corporate headquarters in West Chester Twp.
“We write you today to share our concerns that your proposed section 232 remedy is incomplete when it comes to electrical steel,” the senators said in their letter to Trump. “We write on behalf of a constituent company, AK Steel, which is the last domestic producer of grain-oriented electrical steel (GOES). Since the remedy, as currently constructed, does not include electrical cores and core parts, the remedy will not be effective for the domestic electrical steel market.”
GOES is the type of specialty steel used in the cores of power transformers, which are key components of the country’s critical power grid infrastructure.
The senators told Trump they were pleased to see that his proposed remedy includes grain-oriented electrical steel.
“However, we are concerned that unless you include a handful of additional tariff lines, for products that are essentially just electrical steel sheets stacked, wound and slit, as a part of the scope of the remedy, the remedy will be ineffective for electrical steel,” they said in the letter. “This is because foreign countries will simply set up production of cores, which requires very little capital. They will use foreign GOES to produce the core parts or cores of transformers, and export those products to the United States. In this way, the proposed section 232 remedy actually creates an opportunity for foreign producers to easily bypass the steel tariff and continue to undermine domestic production of electrical steel and cores which are of national security significance.”
The senators urged Trump to consider the concerns they raised and work with them as he finalizes the section 232 remedy.