White House Announces New Measures To Prevent Section 232 Circumvention
Last week, the Biden administration announced measures to try to prevent Chinese metals producers from circumventing Section 232 tariffs on steel and aluminum by routing goods through Mexico. As Connecting the Dots has reported several times, U.S. lawmakers have become increasingly vocal about this problem and have been pressing the White House for action.
The pressure was successful. Starting immediately, for materials crossing the southern border, there is a 25 percent tariff on steel that is not melted or poured in Mexico and a 10 percent tariff on aluminum that is not made in Mexico. Importers of these products into the United States will have to provide a certificate of analysis to U.S. Customs and Border Protection showing the country of origin for the metals. As The Wall Street Journal explained, products from Mexico typically enter the U.S. duty free as part of the United States-Mexico-Canada Agreement.
The White House is coordinating with Mexican President Andrés Manuel López Obrador to implement the penalties. In a statement, President Biden and President Obrador also noted, “To improve transparency of the origins of its imports, Mexico is requiring importers to provide more information about the country of origin of steel products. This action adds to Mexico’s recent tariff increases on steel from non-free trade agreement countries.”
Click here to read the White House’s full proclamation for steel products. Click here to read the proclamation for aluminum products.
As a reminder, when it comes to news about Section 232 tariffs and other penalties, unless otherwise stated, Connecting the Dots is merely reporting information for MSCI members’ benefit 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.