Amendment Proposed to Infrastructure Bill to Ask USTR to Negotiate Limits on Transformer Exports in USMCA

While grain-oriented electrical steel is subject to Section 232 tariffs, the domestic GOES producer says that electrical steel laminations and cores produced in Mexico and Canada continue to imperil the jobs at their mills. Sen. Sherrod Brown, D-Ohio, and Sen. Bob Casey, D-Pa., represent the workers at those mills, and they, along with Sen. Bill Cassidy, R-La., have proposed an amendment to the bipartisan infrastructure bill that would instruct the Office of the U.S. Trade Representative to negotiate with Canada and Mexico in order to get them to agree to measures curtailing their exports if they are so numerous that they damage the business of Cleveland-Cliffs.

The Commerce Department decided last October that imports of laminations and cores used in electrical transformers were damaging U.S. national security, and recommended that the U.S. collect at least a 25% tariff on those products under Section 232 (see 2107290039). However, no tariffs were ever implemented.

In November, the U.S. trade representative said he had gotten Mexico to agree to "establish a strict monitoring regime for exports of electrical transformer laminations and cores made of non-North American” grain-oriented electrical steel, precisely what the amendment is targeting. The USTR said then if there were to be a tariff or quota on electrical transformers or the laminations and cores that are used in them, Mexico would not be subject to it (see 2011050039).

The amendment says officials want to make sure that Canada and Mexico are not being used as pass-through countries for dumped GOES.

In the Aug. 5 press release announcing the amendment, Cleveland Cliffs CEO Lourenco Goncalves said, "As Congress prepares to invest billions of dollars to upgrade America’s electric power infrastructure, it is imperative that this circumvention activity be addressed in order to preserve not only our ability to continue to produce electrical steels in the United States, but also to preserve and grow the significant number of good paying middle-class union jobs associated to the production of GOES by Americans, for our own benefit in the United States."

A spokeswoman for Brown's office said no vote has been scheduled yet on the amendment. A final vote for passage on the underlying bill is expected Aug. 7.