Source: AFP
The United States unveiled tougher rules on Wednesday for steel and aluminum imports from Mexico in an attempt to prevent products from China from evading tariffs.
Actions by President Joe Biden’s administration during the campaign mark the latest in a series of efforts to protect against excess industrial capacity in China, which Washington has repeatedly warned could flood other markets with unfairly priced goods.
Steel arriving through Mexico will qualify for duty-free benefits only if it is melted and poured in that country or in the United States or Canada, White House National Economic Adviser Lael Brainard told reporters. Otherwise, they will face 25 percent tariffs.
According to Biden’s latest proclamation, aluminum imports from Mexico that contain primary cast or cast aluminum to China, Belarus, Iran or Russia will also face 10% tariffs.
Mexico will require importers to provide information on the countries of origin of the products.
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This adds to recent increases in tariffs on steel and aluminum from countries with which it does not have free trade agreements.
“These actions fix an important loophole that the previous administration failed to address that countries like China use to avoid U.S. tariffs by shipping their products through Mexico,” Brainard said.
He charged that “Chinese steel and aluminum entering the U.S. market through Mexico is evading tariffs, undermining our investments and hurting American workers in states like Pennsylvania and Ohio.”
As Biden’s re-election bid enters a critical stage, the president is working to win over voters in swing states, including Pennsylvania.
“China and other nations must not be allowed to exploit trade with our neighbors in order to avoid imposing trade on the U.S.,” said Scott Paul, president of the Alliance for American Manufacturing.
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A senior US official admitted the latest measures are “problematic”.
Nearly 90 percent of Mexico’s roughly 3.8 million tons of steel imports have already been melted down and poured into either the United States, Canada or Mexico, the official said on condition of anonymity.
The rest comes from countries including China, the official added without elaborating.
Similarly, of the 105,000 metric tons of aluminum from Mexico, 94 percent was melted or cast in the three North American countries.
However, officials argued that China is producing beyond domestic demand.
“These joint actions with Mexico will help ensure the long-term viability of our steel and aluminum industries,” said US Trade Representative Kathryn Tye.
In May, the United States announced steep tariff increases on Chinese imports, including electric vehicles and semiconductors. But tariffs on sectors such as EVs were seen as precautionary, as few such cars are imported.
Source: AFP