Biden Administration to Tax Foreign-made Steel and Aluminum Imports Routed through Mexico

AP

13:31 JST, July 11, 2024

WASHINGTON (AP) — The Biden administration is imposing tariffs on steel and aluminum shipped from Mexico that were made elsewhere — an attempt to stop China from avoiding import taxes by routing goods through one of the United States’ closest trading partners.

Lael Brainard, director of the White House National Economic Council, said the tariffs announced Wednesday will be levied as part of an agreement with Mexico through section 232 of the Trade Expansion Act, which applies to imports that could threaten U.S. national security.

There will be a 25% tariff on steel not melted or poured in Mexico and a 10% tariff on aluminum.

The new taxes on steel are meant to address the evasion of tariffs by China, the dominant producer of more than half of the world’s steel. The aluminum taxes would also hit production based in China, Belarus, Iran and Russia.

The move is also a clear political shot at Republican Donald Trump, President Joe Biden’s predecessor and his likely opponent in November’s election. Brainard noted that Trump could have taken similar actions but failed to do so.

“The president is taking action to close loopholes left by his predecessor that allowed China to circumvent trade rules,” she said.

The financial impact of the tariffs is likely somewhat modest, though, given the volumes of steel and aluminum being routed this way through Mexico.

Administration officials said the U.S. imported 3.8 million tons of steel last year from Mexico, with 13% of that having been poured or melted outside that country. Similarly, the U.S. imported 105,000 metric tons of aluminum from Mexico and only 6% was smelted or cast outside that country.

Still, the issue could be politically relevant. Sen. Sherrod Brown, D-Ohio, has called for stopping Mexican steel imports, saying that a “surge” from that country is a threat to U.S. steelworkers and a way to evade tariffs.

Brown is seeking reelection against Republican Bernie Moreno, a wealthy businessman from Cleveland. Ohio was once a political bellwether, but it has voted for Trump in the previous two presidential elections.

Implementation of the new tariffs begins Wednesday with the announcement.