Two Congressmen Argue That Downstream Steel Products From Mexico, Canada Must Be Restricted
The Section 232 tariffs taxing steel have not been enough to protect AK Steel, according to Rep. Troy Balderson, R-Ohio, and Rep. Mike Kelly, R-Pa., who say that restrictive action must be taken against downstream products made of grain-oriented electrical steel imported from Canada and Mexico. They wrote to President Donald Trump on March 6, saying that Canada and Mexico do “very limited processing” on electrical steel that they import, which then enters the U.S. as stacked and stacked cores or laminations. “We implore the U.S. Trade Representative and Department of Commerce to address this matter immediately before our communities lose thousands of jobs and our country sees the door of the last American maker of electrical steel shuttered.” Balderson's district includes an AK Steel facility in Zanesville, Ohio, with 100 jobs, and Kelly's district has an AK Steel mill in Butler, Pennsylvania, with 1,500 jobs.
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The CEO of Cleveland-Cliffs, which is buying AK Steel, recently told Congress members that because Section 232 doesn't cover electrical steel laminations and cores used in electrical transformers, electrical steel produced in Pennsylvania and Ohio is unprofitable, and he will close those plants, Reuters reported. The CEO said that Chinese imports of electrical steel laminations and cores are circumventing tariffs by circumvention using Canada and Mexico. Customs data shows that the importation of electric steel laminations from Canada went from $8.9 million before 232 tariffs began, to $15.4 million and then to $22.6 million last year. Importation of stacked cores from Mexico climbed from $5.5 million to $21.8 million over the same time period; wound core imports from Mexico went from $32 million to $140.7 million.