Market Segment
Senators Threaten Re-imposing S232 Duties on Mexican Steel
February 21, 2023
Thirteen US senators from both major political parties wrote to top trade officials last week requesting that Section 232 tariffs be reinstated on some Mexican steel products, notably steel conduit.
“In recent months, it has become clear that Mexican steel imports ‘now exceed historic volumes of trade’ and are ‘surg[ing] meaningfully” into our market,” the senators wrote to US Trade Representative (USTR) Katherine Tai and Commerce Secretary Gina Raimondo on Feb. 14.
The US lifted 25% Section 232 duties on Mexican steel imports in May 2019 ahead of the negotiation of the US-Mexico-Canada Agreement (USMCA) going into effect in 2020. But terms of the deal provide a mechanism to prevent “surges” in steel imports. If surges in imports of specific steel and aluminum products occur, the US may reimpose Section 232 tariffs on those products, the senators said.
The senators’ letter targeted imports of Mexican conduit. “Since the US lifted Section 232 tariffs, Mexican steel conduit imports have reached unprecedented levels and Mexico’s penetration of the US conduit market has more than tripled, while demand from US consumers has fallen,” the letter said.
The letter references the loss of 200 jobs in California and the closing of a steel conduit plant there as a result of “unfair” Mexican imports. This refers to a Zekelman Industries plant in Long Beach, Calif., shuttered last October.
In response, Mexican steel industry association Canacero wrote a letter Sunday disputing the senators’ claims. The letter, written in Spanish, states that the Mexican steel industry rejects the “protectionist claims” of the US senators who suggest reimposing Section 232 tariffs.
The group called on Mexican authorities to execute an “objective” analysis of the situation and of the benefits of intraregional trade. The Canacero letter also noted that “protectionist tendencies” will probably be more pronounced in the US as 2024 elections approach.
By Ethan Bernard, ethan@steelmarketupdate.com
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