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US tightens tariffs on Mexican steel and aluminum imports

US tightens tariffs on Mexican steel and aluminum imports
US tightens tariffs on Mexican steel and aluminum imports

 


The United States has announced new rules targeting companies from China and other countries that route steel and aluminum shipments through Mexico in an attempt to evade tariffs.

The White House said companies shipping through Mexico must now prove the origin of their products if they want to avoid border taxes.

The move comes as President Joe Biden seeks to demonstrate his toughness on China as he faces his predecessor, Donald Trump, in the 2024 presidential election.

The measures strengthen protections for U.S. steel and aluminum producers that began under Trump in 2018 in the name of national security.

The tariffs, which impose a 25% tax on steel imports and a 10% tax on aluminum imports, have sparked controversy and triggered trade battles with countries around the world.

Mexico, one of the United States' largest trading partners, was among the countries that ultimately won an exemption from the rules.

The White House said it decided to review the exemption for Mexico because a surge in imports from that country suggested it was being used as a staging point to circumvent the taxes.

According to officials, only 13% of the steel imported from Mexico last year – and just 6% of the aluminum – came from outside North America.

But officials said the rules were aimed at preventing a further increase as China's slowing domestic economy pushes companies to look abroad.

Companies shipping steel to the United States must now prove it was melted and cast in North America under new rules, announced jointly with Mexican President Andrés Manuel Lopez-Obrador.

For aluminum, companies must prove that it was not smelted in China, Russia, Belarus or Iran.

The head of the Alliance for American Manufacturing welcomed the new measures, calling them “a step forward in countering China's predatory trade practices and making North American steel trade fairer.”

“This is the right decision for the Biden administration,” the group’s president, Scott Paul, said in a statement.

“China and other countries must not be allowed to exploit trade with our neighbors to evade U.S.-imposed trade measures.”

Others, however, believe the administration should have gone further to limit imports from Mexico.

“We must reinstate tariffs on Mexican steel until their imports return to sustainable levels,” Sen. Sherrod Brown, an Ohio Democrat, wrote on social media.

When he took office, President Joe Biden tried to ease trade tensions, replacing many Trump-era tariffs with other protections such as quotas for countries like the United Kingdom.

But he also maintained or extended other tariffs imposed by his predecessor, a sign of a major shift in U.S. policy once known for promoting free trade.

Political party leaders are responding to voter backlash against globalization, particularly in key swing states like Pennsylvania, which was once home to a major steel industry.

Both Mr. Trump and Mr. Biden have highlighted their steel industry protections while courting voters in the state.

If elected, Mr. Trump has pledged to go further than he did in his first term, proposing a 10% tariff on all imports, rising to 60% on goods from China.

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