President Joe Biden must protect the American industrial base by increasing tariffs on Mexican steel imports, said U.S. Sen. Bob Casey (D-PA) and a bipartisan group of his colleagues.
In a Sept. 17 letter sent to the president, the lawmakers urged Biden to take additional administrative action to stop Mexico’s “unfair steel surge,” as well as China’s manipulation of the United States-Mexico-Canada Agreement (USMCA).
“Stopping China’s abuse of USMCA and Mexico’s steel surge is about protecting American industry and building economic resilience. It is also about enforcing our trade deals,” wrote the senators. “What is the point of reaching trade deals if such deals are not paired with effective enforcement?”
Currently, the People’s Republic of China (PRC) illegally dumps steel into the U.S. market by transshipping steel through Mexico, which allows the PRC to evade tariffs and threatens the jobs of steelworkers in Pennsylvania and the nation, according to the letter.
“It is vital to address China’s rampant exploitation of Mexico as an intermediary for the transshipment of goods,” wrote Casey and his colleagues. “Accordingly, we ask that you reimpose duties on Mexican steel imports at 2019 levels and that you work to prevent Chinese firms from exploiting USMCA for its own benefit by shifting their facilities to Mexico.”
They acknowledged that the Biden administration on July 10 re-imposed a 25 percent tariff on Mexican steel melted or poured outside of North America.
“While this was an important step, it [will] be insufficient because it did not apply tariffs to any steel melted and poured in Mexico itself and subsequently affected only 13 percent of total steel imports from Mexico,” they wrote. “This step also did not include any measures to stop Chinese steelmakers from shifting their production to Mexico to exploit USMCA and further fuel the steel surge.”
Casey and his colleagues also pointed out that the United States Trade Representative already has the authority to raise duties on Mexican steel imports unilaterally and the administration should use it.
They also urged Biden to quickly implement the revision to the U.S. Customs and Border Protection Form 7501, announced on March 25, which they said adds important information about where the steel used in the manufacturing of products was melted and poured, or in the case of aluminum, the countries where the largest and second largest volume of primary aluminum used was smelted.
“Such a change has the support of domestic steel and aluminum producers, who believe that these revisions will help enforce trade remedy laws and prevent circumvention of sanctions regimes,” wrote the senators.
The lawmakers who joined Casey in signing the letter were U.S. Sens. Marco Rubio (R-FL), Sherrod Brown (D-OH), and Mike Braun (R-IN). They told Biden that the U.S. must work with the Mexican government to ensure that its trading partnership is built not just on geographic proximity, “but also on a shared goal of defending North American manufacturing jobs from the Chinese Communist Party.”