The Biden administration has announced the imposition of tariffs on steel and aluminum imported from Mexico that originated elsewhere, with the aim of preventing China from avoiding import duties by using Mexico as a conduit. Lael Brainard, the director of the White House National Economic Council, stated that these tariffs, which were revealed on Wednesday, will be enforced under an understanding with Mexico through section 232 of the Trade Expansion Act, focusing on imports that could pose a threat to U.S. national security. A 25% tariff will be applied to steel not melted or poured in Mexico, while a 10% tariff will be imposed on aluminum.
The objective behind the new steel tariffs is to tackle China’s strategy of evading tariffs, as China is the leading producer of over half of the world’s steel. The aluminum tariffs will also impact production from China, Belarus, Iran, and Russia. This decision is perceived as a political move aimed at Donald Trump, President Joe Biden’s predecessor, and probable opponent in the upcoming election in November. Brainard highlighted that Trump had the opportunity to take similar actions but did not do so. She remarked, “The president is taking action to close loopholes left by his predecessor that allowed China to circumvent trade rules.”
Although the financial effect of the tariffs is expected to be relatively moderate due to the quantities of steel and aluminum being rerouted through Mexico, the issue holds political significance. The U.S. imported 3.8 million tons of steel from Mexico last year, with 13% of that originating outside Mexico. Similarly, the U.S. imported 105,000 metric tons of aluminum from Mexico, with only 6% produced outside Mexico. Senator Sherrod Brown of Ohio has called for halting Mexican steel imports, claiming that the influx from Mexico poses a threat to U.S. steelworkers and serves as a means to avoid tariffs. Brown is running for reelection against Republican Bernie Moreno, a prosperous businessman from Cleveland. Ohio, which was traditionally a political swing state, voted for Trump in the two most recent presidential elections.
The implementation of the new tariffs initiates with the announcement made on Wednesday.
