Photo courtesy of Cleveland-Cliffs Inc.
Cleveland-Cliffs President and CEO Lourenco Goncalves has issued a statement thanking President Donald Trump's administration for expanding the Section 232 tariff regimen to cover electrical steel and stainless steel derivative products.
Last Friday, the U.S. Commerce Department issued a list of more than 400 items (designated by Harmonized Tariff Schedule, or HTSUS, product code) now subject to the 50 percent Section 232 tariff rules.
On Monday, Cleveland-based Cliffs issued comments from Goncalves while also indicating it applauded the tariff action by the U.S. Department of Commerce to include as derivative products subject to Section 232 steel tariffs electrical steel laminations and cores, as well as certain stainless steel automotive exhaust parts.
“Cleveland-Cliffs thanks President Donald Trump and Secretary of Commerce Howard Lutnick for taking decisive and concrete action that will deter tariff circumvention occurring in plain sight with stainless and electrical steel derivative products,” Goncalves says. “Since we acquired AK Steel Corp. a few years ago, we have identified and denounced circumvention schemes through Mexico and Canada involving derivative products using steel melted and poured outside of North America.
“This practice, which has been accepted and supported by both Canada and Mexico—despite its inherent conflict with the original intent of the USMCA [United States-Mexico-Canada] trade agreement—has ultimately turned into a blatant tariff evasion subterfuge. Today’s action taken by the Secretary of Commerce gives us certainty that the American domestic market will not be undercut by unfairly traded steel embedded in derivative products."
Goncalves says the decision opens the door for Cleveland-Cliffs to continue to invest in its stainless steel operations in Coshocton, Ohio, and Mansfield, Ohio, as well as in its electrical steel operations in Butler, Pennsylvania, and Zanesville, Ohio, in support of domestic clients.
Late last week, reports from Bloomberg and other outlets not yet verified by Cleveland-Cliffs indicated the steelmaker had signed contracts up to three years in length to provide domestically made steel to up to three different automakers.
Bloomberg says its sources have indicated Cliffs will supply steel to General Motors, Ford and Stellantis in contracts considered longer in duration than is typical in the automotive sector.