Background

Tariffs, quotas, and/or other restrictions on could be imposed on certain transformer components as a result of the Trump administration’s latest trade enforcement effort.

The Department of Commerce has announced that it will self-initiate an investigation under section 232 of the Trade Expansion Act of 1962 to determine whether U.S. national security is being harmed by imports of laminations for stacked cores for incorporation into transformers, stacked and wound cores for incorporation into transformers, electrical transformers, and transformer regulators.

A DOC press release explains that transformers are part of the U.S. energy infrastructure. Laminations and cores made of grain-oriented electrical steel are critical transformer components, and electrical steel is necessary for power distribution transformers for all types of energy, including solar, nuclear, wind, coal, and natural gas. DOC states that “an assured domestic supply of these products enables the United States to respond to large power disruptions affecting civilian populations, critical infrastructure, and U.S. defense industrial production capabilities.”

If the DOC (which must consult with the Department of Defense) finds that excessive imports of these goods are a threat to U.S. national security, and the president concurs, the president has the authority to adjust imports, including through the use of tariffs and quotas. Any such actions would be imposed within 15 days of the president’s determination to act.

The DOC has up to 270 days to conclude a section 232 investigation and submit its report and recommendations to the president. A hearing date and request for public comments are expected to be published shortly in the Federal Register.

For more information on this section 232 investigation and how it may affect your business, please contact trade attorney Kristen Smith at (202) 730-4965.

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Kristen S. Smith
Member, Trade Remedies Practice Group Leader

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