US and Mexico take action to curb 'unfair' trade

Written by Laura Miller

The US and Mexico announced measures on Wednesday to prevent tariff evasion and protect North America’s steel and aluminum industries.

President Joe Biden decreed that steel imports from Mexico again be subject to 25% Section 232 tariffs – unless the products are melted and poured in Mexico, the US, or Canada.

Additionally, the president issued a smelt-and-cast requirement for aluminum imports from Mexico: Any product from Mexico whose “primary country of smelt, secondary country of smelt, or country of most recent cast” is China, Russia, Belarus, or Iran will be subject to 10% 232 duties upon entering the US.

This new rule applies to imports of steel, steel derivatives, aluminum, and aluminum derivatives entering the US on or after July 10, according to Biden’s presidential proclamation.

Importers will now be required to provide documentation to US Customs and Border Patrol (CBP) identifying the country where the raw steel used to manufacture steel products was originally melted and poured.

“CBP shall implement the melt and pour information requirements as soon as practicable,” Biden’s proclamation stated.

Likewise, Mexico will now require importers to declare the country of origin for any steel coming into the country, according to a joint statement from Biden and the president of Mexico, Andres Manuel Lopez. Mexico has also agreed to raise tariffs on steel from countries without free trade agreements.

“In the coming weeks and months, Mexico and the United States will continue to work together to protect the North American steel and aluminum markets from unfair trade practices,” the presidents’ statement noted.

Steel response

The Steel Manufacturers Association (SMA) is supportive of the measures.

SMA President Philip K. Bell noted that Wednesday’s “announcement is the result of years of hard work by the Office of the US Trade Representative. … We appreciate USTR’s leadership, tenacity, and transparency with the steel industry throughout the process.”

Bell said the melted and pour standard and Mexico raising tariffs “are two important steps that SMA members have long advocated for and are critical to stopping unfairly traded steel crossing our border from Mexico.”

“We stand with the administration and hope for continued engagement between our two countries to enforce today’s agreement and continue work that prevents import surges,” Bell added.

The American Iron and Steel Institute (AISI) also welcomed the presidential actions.

“This important change is intended to close a loophole in the Section 232 program that has allowed steel made outside of North America to evade the steel tariffs by being shipped to Mexico for further processing before being exported to the United States,” explained AISI President and CEO Kevin Dempsey.

He noted that the measures will only be effective if Mexico accurately collects and reports on the country of melt and pour.

“We urge the US government to continue to press for additional actions to address the many schemes by steel traders to circumvent and evade US trade laws, and to ensure this new arrangement is vigorously and fully enforced,” Dempsey added.

Political response

Biden’s proclamation comes after months of calls from political figures to address increasing steel imports from Mexico and the transshipment of steel and aluminum through Mexico.

US Sen. Sherrod Brown (D-Ohio) was a cosponsor of the “Stop Mexico’s Steel Surge Act” introduced in the Senate earlier this year. The legislation seeks to reimpose 25% Section 232 tariffs on steel from Mexico.

Commenting on Wednesday’s announcement, Brown said, “This is a necessary and long-overdue first step to stop the alarming rise in Chinese steel and aluminum coming into the country through Mexico – but it will only make a difference if it’s enforced.”

Laura Miller

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