This article is written by Austin Garcia
The United States and Mexico have unveiled a series of measures to curb the circumvention of U.S. tariffs on steel and aluminum, specifically targeting products from China that are shipped through Mexico.
Announced last Wednesday, these measures aim to bolster steel and aluminum trade between the two countries. A key component is the introduction of a North American “melted and poured” standard for steel. Under this new policy, steel imports from Mexico will face a 25% tariff under Section 232 of the U.S. Trade Expansion Act, unless the steel is verified to have been melted and poured in Mexico, the U.S., or Canada, the members of the USMCA trade pact. Section 232 of the 1962 Trade Expansion Act allows the president to adjust tariffs on imports that threaten national security.
For aluminum imports to avoid a 10% tariff, the product must not contain primary aluminum smelted or cast in China, Russia, Belarus, or Iran. U.S. importers of steel and aluminum will need to provide certificates of analysis to U.S. Customs and Border Protection, verifying the metals’ country of origin.
Additionally, Mexico has agreed to require companies importing steel into Mexico to provide more detailed information on the metal’s country of origin. “Both countries will implement policies to jointly prevent tariff evasion on steel and aluminum and strengthen North American steel and aluminum supply chains,” stated U.S. President Joe Biden and Mexican President Andrés Manuel López Obrador in a joint announcement.
These new import requirements are part of a broader strategy to address concerns about China’s excess industrial capacity flooding global markets, which has led to increased U.S. tariffs on various Chinese goods. U.S. officials have expressed worries that Mexico could become a conduit for tariff-avoiding Chinese products entering the U.S. market, exploiting Mexico’s duty-free access under the USMCA trade pact.
In April, Reuters reported that U.S. officials had cautioned Mexico against offering incentives to Chinese electric vehicle manufacturers seeking to set up factories in Mexico. U.S. Trade Representative Katherine Tai noted that the new measures “address a gap that the previous administration and its isolated trade policies left unaddressed.”
According to a statement from Mexico’s Ministry of Foreign Affairs titled “Mexico works to strengthen the national steel industry,” the measures include an agreement with the U.S. to design a mechanism ensuring that Brazilian steel processed in Mexico is not subject to tariffs.
Despite the relatively small volume of steel imports into the U.S. from Mexico that originated elsewhere—only about 13% of the 3.8 million tons imported in 2023—U.S. officials believe the new measures will prevent a potential surge in imports from China, where domestic demand remains weak. The American Iron and Steel Institute praised the new measures while emphasizing the need for Mexico to provide accurate information on its metal imports to ensure effective enforcement.
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