Mexico Agrees to Goal of Reinstating Export Monitoring Regime
WASHINGTON — The Coalition for a Prosperous America (CPA) today applauded United States Trade Representative (USTR) Katherine Tai for securing a commitment from Mexico’s Secretary of Economy Raquel Buenrostro to reinstate Mexico’s export monitoring regime. Export monitoring was previously used to ensure compliance with a 2019 joint agreement on steel and aluminum products in which the U.S. agreed to lift steel tariffs in return for Mexico avoiding a surge of steel imports. However, Mexico has continued to blatantly violate that joint agreement, which is why reinstating the export monitoring regime is critical.
Importantly, Ambassador Tai reinforced the importance of Mexico adhering to the agreement and addressing “the recent surges in Mexican exports of certain steel and aluminum products to the United States and the lack of transparency regarding Mexico’s steel and aluminum imports from third countries. Ambassador.” The two spoke ahead of the third meeting of the U.S.-Mexico High Level Economic Dialogue.
“We applaud Ambassador Tai for her continued focus on enforcing trade deals and protecting American manufacturers and workers from predatory and illegal trade activity,” said Michael Stumo, CEO of CPA. “Mexico is blatantly violating the 2019 joint steel agreement with a continuing surge of exports beyond historic levels. The U.S. abided by its commitments, but Mexico did not. As such, Mexico should immediately implement an export monitoring system to prevent cheating on the deal by Mexican steel companies like Deacero that ships wire rod and rebar, and Rymco USA, a Mexican company that cheats on tariff line designations to avoid detection. Additionally, the U.S. should be ready to quickly implement quotas or tariffs if Mexico fails to agree or abide by its commitments.”
A March 2023 report from the U.S. International Trade Commission (USITC) showed that the Section 301 and 232 tariffs boosted U.S. domestic production in all twelve of the industries studied. Importantly, the steel industry responded to the tariffs with a wave of announcement of new facilities, some of which are already producing steel and others are under construction. Section 232 steel tariffs unleashed a huge wave of steel investment, creating roughly 20,000 direct jobs. Contrary to the false narrative by free traders and globalists that tariffs drastically increase consumer prices, the USITC report found that price increases in the product categories targeted with tariffs were very small, in the 3%-4% range. Most of the tariffs targeted intermediate (industrial) goods. Downstream goods, including consumer goods, saw barely visible tariff-related price increases.
Despite the joint agreement, duty-free steel imports from Mexico have risen 141% over historic levels, with some subcategories of imports tripling and quadrupling. This includes a 577% increase in steel conduit imports for 2022, compared to the baseline period of 2015 to 2017. In February, CPA applauded a bipartisan letter to Secretary of Commerce Gina Raimondo and U.S. Trade Representative Katherine Tai urging them to take action against Mexico’s blatant and continuing breach of a 2019 agreement to lift steel tariffs in return for Mexico avoiding a surge of steel imports.
Last November, CPA called on the Biden administration to resume the 25 percent tariff for steel conduit from Mexico in response to the surge of steel conduit imports. CPA now also calls for the reimposition of the 25% tariff for Wire Rod and other steel long products. This surge is a violation of Mexico’s commitments in the May 2019 Joint Statement by the United States and Mexico on Section 232 Duties on Steel and Aluminum.
As CPA CEO Michael Stumo wrote in Industry Week, “The Biden administration must stand up for America’s steelmakers. And it shouldn’t let other countries openly flout the terms of agreements they’ve negotiated with Washington. Unless Mexico immediately adheres to its 2019 steel obligations, President Biden should reimpose Section 232 tariffs on Mexican steel.”