Dramatic Increase Violates 2019 U.S.-Mexico Agreement
WASHINGTON — The Coalition for a Prosperous America (CPA) today applauded Senator Tom Cotton (R-AR) for leading 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. The Senators’ letter documents how “the volume of annual iron and steel imports from Mexico has increased approximately 73 percent over the pre-Section 2323 2015-2017 baseline, semi-finished steel and long product imports are up 120 percent, and steel conduit imports have risen by an even more disturbing 577 percent.”
Senators Sherrod Brown (D-Ohio), John Boozman (R-Arkansas), Bob Casey (D-Pennsylvania), Thom Tillis (R-North Carolina), Tammy Baldwin (D-Wisconsin), Ted Budd (R-North Carolina), Elizabeth Warren (D-Massachusetts), Katie Britt (R-Alabama), Tina Smith (D-Minnesota), Rick Scott (R-Florida), Marco Rubio (R-Florida), and J.D. Vance (R-Ohio) co-signed the letter.
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. 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.”
As CPA documented in January, steel imports from Mexico have surged over the past several years. U.S. steel imports from Mexico have risen by 141% over historic levels, with some subcategories of imports tripling and quadrupling, despite a 2019 U.S.-Mexico agreement to maintain steel imports at past levels. The surge in steel imports in Mexican steel conduit, used in construction, led to the closure last year of a Long Beach, California steel factory with the loss of 145 union jobs. Excessive Mexican steel imports, in addition to the global oversupply of steel, harms U.S. steel manufacturers by reducing revenue, investment, and employment in the U.S. steel industry.
“We urge the Biden administration to immediately begin consultations under the 2019 agreement to address this surge of Mexican steel and return imports to “historic volumes of trade,” with quotas, if necessary,” the senators wrote. “However, if the Mexican government refuses to remedy this breach, we regretfully urge the administration to consider other mechanisms to ensure compliance and protect American jobs, including the reapplication of Section 232 tariffs.”
Read the Senators full letter here.