U.S. Senators Introduce Bill To Force Biden Administration To Act On Steel Import Surge
As Connecting the Dots has reported several times over the last few months, the Biden administration and members of the U.S. Senate and House of Representatives have become increasingly worried about a surge in metals exports coming from Mexico, and where these products may have originated.
To address these anxieties, last week a bipartisan group of senators introduced legislation that, if enacted into law, would compel the Biden administration to reinstate Section 232 tariffs, which were set at 25 percent by the Trump administration, on steel coming into the United States from Mexico.
Sen. Sherrod Brown (D-Ohio) and Sen. Tom Cotton (R-Ark.) are the primary sponsors of the bill. In a statement, the two lawmakers argued the Mexican government is violating a 2019 trade agreement with the United States and Canada that requires each of the U.S. North American trading partners to provide greater transparency regarding steel and aluminum imports from third party countries and that, should imports climb above 2015-2017 levels, they begin consultations to address such a surge. (In 2022, U.S. imports of steel from Mexico were up 72 percent in 2022 compared with the 2015-2017 historical average.)
The senators also argued the Biden administration has not yet done enough to address the surge in imports into the United States from Mexico.
The bill, called the Stop Mexico’s Steel Surge Act, would reinstate the Section 232 steel tariffs for no less than a year and give the U.S. president the authority to impose additional quotas and tariff rate quotas on specific products if needed. The tariffs could be lifted only once the U.S. Secretary of Commerce and U.S. Trade Representative certified that the Mexican government has adopted policies to bring its processes into compliance with the 2019 trade agreement.
“When Mexico breaks the rules they agreed to, the Administration needs to hold them accountable,” Sen. Brown said. Sen. Cotton agreed. He argued, “It’s past time for more negotiation. This legislation will stop Mexico from continuing to surge steel into our market.”
In related news: last week, U.S. Trade Representative Katherine Tai told the European Union that if that body reopened a case at the World Trade Organization (WTO) against the United States’ Section 232 steel and aluminum tariffs it would be putting efforts to reform and revive the WTO’s dispute settlement system at risk. Read more about that issue here.
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.