A bipartisan group of senators is calling on the Administration to increase US tariffs on steel imported from Mexico in the face of an import surge.
Mexico’s rising steel exports to the United States violates the 2019 bilateral agreement reached so that Mexico would not be subject to the 25 percent Section 232 tariffs on steel.
At the same time, the senators said that China is moving manufacturing to Mexico in order to avoid paying US tariffs and to take advantage of the US-Mexico-Canada Agreement.
“Stopping China’s USMCA abuse and Mexico’s steel surge is about protecting American industry and building economic resilience. It is also about enforcing our trade deals. What is the point of reaching trade deals if our leaders fail to enforce them? ‘Tough’ rhetoric will not serve American industry unless it is met with action,” Sens Marco Rubio (R-Fla), Sherrod Brown (D-Ohio), Mike Braun (R-Ind) and Bob Casey (D-Pa) wrote in a letter to President Biden.
“Mexico’s steel surge and China’s manipulation of USMCA significantly threaten our country’s industrial capacity and must also be promptly stopped. Accordingly, we ask that you reimpose duties on Mexican steel imports at 2019 levels and that you work to prevent Chinese firms from exploiting
USMCA for its own benefit by shifting their facilities to Mexico.”
Imports of Mexican steel conduit have soared to around 500 percent over the 2015-2017 baseline
and may rise to 700 percent this year, according to the senators.
“We have written to you repeatedly about this surge, expressing our concerns that it has resulted
in steelworkers losing their jobs and steel companies having no choice but to defer hundreds of millions of dollars in investment. Along with a bipartisan coalition of Senators and Members of Congress, we also introduced legislation to require the Secretary of Commerce to reimpose 25 percent duties on all Mexican steel imports for no less than a year. However, legislation is not required to remedy these violations; the United States Trade Representative (USTR) already has the authority to raise duties on Mexican steel imports unilaterally. We urge your administration to use it.”
With a five-year review of the USMCA coming up, the senators said the Administration needs to work with Mexico now to ensure Chinese firms are not exploiting the agreement by setting up operations in Mexico.
“Allowing Chinese firms – which routinely benefit from slave labor, stolen intellectual property, and massive state subsidies – to circumvent American trade enforcement and exploit our free trade agreements threatens American production. Our leaders must work diligently to replace Chinese production with American production, and that of our trading partners. Congress passed a free trade deal with Mexico – not China. Immediate action must be taken to prevent the Chinese Communist Party from exploiting USMCA and weaponizing this important trade deal.”
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