February 26, 2024

Biden Administration Warns That It Could Bring Back Section 232 Penalties For Mexican Metals

The Biden administration is growing increasingly concerned about a “surge” of steel and aluminum imports coming into the United States from Mexico. Indeed, according to SteelOrbis, U.S. officials have reminded Mexican government officials that the United States reserves the right to reimpose its Section 232 tariffs on steel and aluminum imports if Mexico does not get its export levels in check.

Specifically, in a meeting early last week with Mexico’s Secretary of Economy Raquel Buenrostro, U.S. Trade Representative Katherine Tai highlighted “the urgent need” for Mexico to address the matter and to provide additional transparency into the country’s imports from third countries. (As a reminder, under the United States, Mexico, Canada Agreement (USMCA) implemented during the Trump administration, both countries promised to implement a system to monitor metals’ trade flows. The Mexican government still has not implemented that system.)

The Biden administration is under pressure from federal lawmakers to act. Last week, for example, U.S. Sens. Ted Budd (R-N.C.) and Thom Tillis (R-S.C.) sent a letter to Ambassador Tai and U.S. Secretary of Commerce Gina Raimondo asking that the Biden administration immediately limit the volume of Mexican steel concrete reinforcing bar, or rebar, that is being imported into the United States.

Click here to read the letter.

Ambassador Tai said negotiations between the two countries will continue while Mexican officials said further discussions should include cooperation between anti-dumping agencies, as well as strengthening regional tracking mechanisms.

In related news, in an appearance at the Council on Foreign Relations, Ambassador Tai was asked about a study that determined the United States’ Section 232 tariffs on metals imports had done little to boost the nation’s economy. In her answer, Tai defended the policy. “They are a playing field leveling tool. They are a tool for remedying unfair trade,” said. “I actually kind of like the way the Europeans describe these types of tools … They call them trade defense instruments. So, you know, within the world of the World Trade Organization (WTO) and what is blessed by WTO are trade remedies and trade defense and the use of tariffs to counterbalance unfair trade, like dumping and illegal subsidization.”

Click here to read Ambassador Tai’s full remarks.

As a reminder, when it comes to Section 232 tariffs, Connecting the Dots reports developments for members’ information only.

MSCI consistently has argued that global overcapacity and other unfair trading practices, particularly by China, have harmed the U.S. steel and aluminum markets. To address this circumvention, MSCI has advised federal officials to provide relief for producers up and down the supply chain and to consider the consequences of any new trade policy, including: the economic impact of global overcapacity on the entire domestic metals supply chain; transition times and implementation rules to any new policy; availability of domestic metals to meet U.S. national security needs, as well as general industrial and consumer demand; and trade flows under current free trade agreements, including the United States Mexico Canada Agreement (USMCA). MSCI also asked that Canada and Mexico be excluded from any trade penalties.

Click here to review all of MSCI’s advocacy on Section 232 tariffs.

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