U.S. and Mexico Crack Down on Chinese Steel Imports with New Tariffs
The new tariffs will also hit steel and aluminum imported into the U.S. from Belarus, Iran and Russia through Mexico.
In a significant step to crack down on trade circumvention, the White House has announced that the U.S. will impose a 25% tariff on Chinese steel and aluminum products shipped through Mexico to evade existing tariffs.
This policy targets imports routed through Mexico to avoid tariffs initially imposed on Chinese metals that are state-subsidized and, hence, cheaper than their American counterparts. It aims to strengthen the integrity of the North American steel and aluminum markets and safeguard a level playing field for all stakeholders.
The joint efforts by the United States and Mexico to implement these new tariff measures demonstrate a commitment to maintaining fair trade practices and protecting domestic industries.
The White House declared that under the newly implemented policy, steel and aluminum products imported from Mexico will be subjected to a 25% U.S. “Section 232” tariff unless the metals are proven to have been melted and poured in either Mexico, the United States, or Canada.
Section 232 of the Trade Expansion Act of 1962 permits the U.S. President to modify the imports of articles and their derivatives into the country in the event that they threaten national security.
“Mexico and the United States are taking key measures today to protect the North American steel and aluminum markets from unfair trade,” Presidents Biden and Lopez Obrador stated in a joint announcement. “Both countries will implement policies to jointly prevent tariff evasion on steel and aluminum and strengthen North American steel and aluminum supply chains (Mexico, United States, and Canada).”
China is the largest steel producer in the world, and the newly imposed tariffs are designed to address China's evasion of tariffs. The policy also targets aluminum production based in China, Belarus, Iran, and Russia, ensuring these countries cannot exploit trade routes through Mexico to avoid U.S. tariffs.
Scott Paul, president of the Alliance for American Manufacturing (AAM), supported the new tariffs. The Washington D.C.-based AAM, a nonprofit, nonpartisan partnership formed in 2007, focuses on strengthening American manufacturing and creating new private-sector jobs through supportive public policies.
“We know Beijing is using countries like Mexico to dodge U.S. tariffs, including duties specifically put into place to deter China’s massive industrial overcapacity,” Paul stated in a news release. “China and other nations must not be allowed to exploit trade with our neighbors to avoid U.S. trade enforcement.”
Liu Pengyu, a spokesperson for the Chinese Embassy in Washington, criticized the U.S. for repeatedly resorting to higher tariffs. He described the existing tariffs as “a manifestation of the U.S.’s unilateralism and protectionism.” However, Biden insisted that adopting a tougher stance on China is a sound policy.
According to Census Bureau figures analyzed by the Associated Press, the United States imported nearly $6.1 billion in steel products in the 12 months ending in February 2023, with only 3% of those imports coming directly from China.
However, in 2023, the U.S. imported nearly $3 billion worth of steel, aluminum, and other metals from Mexico through the port of entry in Laredo, Texas.
For more information on this story and how these new tariffs may affect your business, please contact one of our trade professionals.