Last week, the Department of Commerce (the “Department”) initiated two new Section 232 proceedings on mobile cranes and electrical transformer components. Section 232, a previously seldom used section of the Trade Expansion Act of 1962, is used to investigate the impact of certain imports on national security and provide relief if those imports threaten to impair U.S. national security. During the Trump Administration, Section 232 has been used to investigate imports of steel, aluminum, automobiles (and parts), titanium sponge, and uranium. Under Section 232, President Trump has imposed tariffs on steel and aluminum.
The investigation on electrical transformer components will cover laminations for stacked cores for incorporation into transformers, stacked and wound cores for incorporation into transformers, electrical transformers, and transformer regulators. Transformers are an essential part of the U.S. energy infrastructure. The Department’s press release notes that “[a]n 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.” Several members of Congress had previously urged the Administration to initiate proceedings.
The investigation on mobile cranes follows a petition filed by domestic producer The Manitowoc Company, Inc. (“Manitowoc”), according to the Department’s press release. That petition, filed in December, alleges that “increased imports of low-priced mobile cranes, particularly from Germany, Austria, and Japan, and intellectual property (IP) infringement by foreign competition, have harmed the domestic mobile crane manufacturing industry.” Mobile cranes are considered a critical industry due to their extensive use in national defense and critical infrastructure applications. Manitowoc also alleges that low-priced imports and IP infringement of mobile cranes caused the closure of one of its two U.S. production facilities, eliminating hundreds of skilled U.S. manufacturing jobs.
The Department now has 270 days to provide a report to President Trump determining whether these imports threaten to impair U.S. national security, along with a recommendation for action. President Trump will then have 90 days to determine whether or not to impose restrictions so that imports no longer threaten national security.