Michael Stumo: Biden Administration Drops the Ball on Mexico’s Steel Surge

Steel has long been one of the world’s most important industrial commodities — and a vital sector of the U.S. economy. In recent years, however, Mexico has flooded the United States with underpriced steel products. It’s a blatant violation of a 2019 agreement, and although President Biden has finally taken action, his response falls far short of what’s needed to protect America’s steel companies.

In 2019, Mexico pledged to hold the volume of its steel exports to specific levels. In return, the Trump administration agreed to lift tariffs on steel shipped from Mexico. That seemed promising for America’s steel pipe and tube manufacturers. But since then, Mexico has brazenly and continuously violated the agreement.

Mexico’s shipments to the U.S. of steel made elsewhere have risen dramatically since then, reaching an astounding 472% above the levels set in 2019. This year, Mexican steel imports are on track to reach roughly 700% above the levels set in 2019. In addition, Mexico now accounts for over 87% of U.S. steel conduit imports.

And Zekelman isn’t the only steel producer struggling. A recent Coalition for a Prosperous America analysis found that more than 1 million U.S. jobs are now at risk due to Mexico’s ongoing steel surge. In fact, the problem has grown so serious that a group of 10 U.S. senators recently introduced bipartisan legislation to reimpose tariffs on Mexico.

After more than two years of urgent calls for action by America’s steel companies, the Biden administration finally responded. The president has announced a 25% tariff on all steel products melted, poured or cast outside North America. This was intended to prevent China and other countries from routing their steel exports through Mexico.

Unfortunately, the president’s action fails to address either Mexico’s breach of the 2019 agreement or its surging steel exports.

Essentially, the administration established a “melted and poured” requirement. For Mexico to continue enjoying duty-free entry, its raw steel must come from North America. Any products made from raw steel produced outside North America will face a 25% tariff.

Unfortunately, that doesn’t address the problem. By focusing on raw steel, the president’s action will apply to a mere 9.8% of Mexico’s steel exports to the U.S. The remaining 90% will continue to enjoy duty-free treatment in the United States. And that means Mexico can keep flooding the U.S. with pipe and tube products.

For more than two years, domestic steel producers have been urging the Biden administration to act on Mexico’s steel surge. But despite Mexico’s clear breaching of the agreement for several years, the Biden administration chose to negotiate rather than enforce a standing international agreement.

This is a major failure that is directly harming American workers and manufacturers. The White House should have imposed tariffs or quotas on conduit, rebar, wire rods and other steel products from Mexico. Congress must take action and impose tariffs on Mexican steel products.