U.S. Begins National Security Probe Of Electrical Grid Imports

US begins national security probe of electrical grid imports

Financial Times · by Aime Williams · May 4, 2020

The Trump administration has launched a national security investigation that could lead to new tariffs on electrical grid parts as concerns grow over US reliance on overseas supply chains.

The Department of Commerce said on Monday it would launch the so-called Section 232 inquiry into whether the parts, including electrical transformers, transformer cores and transformer regulators, were being imported into the US in quantities that threatened national security.

Wilbur Ross, commerce secretary, has written to Mark Esper, defence secretary, to inform him of the investigation, the commerce department said in a statement. Mr Ross said his department would conduct a “thorough, fair and transparent review”.

The security of the US electrical network has long been a concern in Washington. Transformers are a critical part of the US energy infrastructure, while cores made of electrical steels are necessary for power distribution for energy across the country.

“An assured domestic supply of these products enables the United States to respond to large power disruptions affecting civilian populations, critical infrastructure and US defence industrial production capabilities,” the commerce department said in its statement.

The investigation follows an executive order issued by President Donald Trump on Friday blocking the use of some foreign-made electrical components in the US power grid.

Mr Trump said transactions involving “bulk power system electric equipment” directed, controlled or even designed by a “foreign adversary” would be subject to special scrutiny, including a block on imports.

“The bulk-power system is a target of those seeking to commit malicious acts against the United States and its people, including malicious cyber activities,” he said.

“Although maintaining an open investment climate in bulk-power system electric equipment, and in the United States economy more generally, is important for the overall growth and prosperity of the United States, such openness must be balanced with the need to protect our nation against a critical national security threat.”

The move was welcomed by Cleveland-Cliffs, a company whose wholly-owned subsidiary AK Steel is the last remaining producer of the type of electrical steel used in essential transformer parts in North America.

The commerce department has previously used Section 232 — which enables it to determine the impact of imports on national security — to apply tariffs on steel and aluminium imports.

The White House and members of Congress have become increasingly concerned about US reliance on international supply chains in a range of areas, from medical gear and pharmaceuticals to food.

The US imports almost half its personal protective medical equipment, including masks, goggles and gloves, from China, according to figures compiled by the Peterson Institute for International Economics, leading some lawmakers to express concerns over national security vulnerabilities.

As part of its trade war with Beijing, the Trump administration has already leaned on US corporations to reshore operations from China, partly through its punitive tariff regime.

Financial Times · by Aime Williams · May 4, 2020

One comment

  1. Think about it. How often have excursions to the shop looked like a ride in a toaster? Luckily, warm exterior temperatures do not necessarily mean you must drive in distress.

Leave a Reply

Your email address will not be published. Required fields are marked *