Mexican import surge is a clear violation of 2019 agreement
WASHINGTON — The Coalition for a Prosperous America (CPA) today urged 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. CPA’s letter to Commerce Secretary Gina Raimondo and Ambassador Katherine Tai, the U.S. Trade Representative, documents a clear surge in Mexican imports for 2022—a violation of the 2019 agreement which should result in resuming Section 232 tariffs.
This is similar to China’s brazen violations of the “Phase One” agreement negotiated by the Trump administration in 2020. In exchange for reduced U.S. tariffs, China pledged to purchase more U.S. agricultural and manufacturing goods. But Beijing reneged—and met only 63% of its commitment.
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.”
Removal of the 25 percent tariff for Mexico was conditioned on imports of steel articles from Mexico remaining stable at historical levels without meaningful increases. The commitment to American steel producers was: “If surges in imports of specific steel and aluminum products occur, the United States may re-impose Section 232 tariffs on those products.”
A surge is precisely what happened for steel conduit: a 577% increase in steel conduit imports for 2022, compared to the baseline period of 2015 to 2017.
What makes Mexico’s violation of the 2019 agreement particularly injurious is that the demand for steel conduit in the U.S. did not grow during this period, and more recently has actually been going down.
As a result, American workers and producers are suffering. Wheatland Tube, a steel conduit manufacturer, is closing its Long Beach, California factory and laying off 145 workers. The company cited surging Mexican steel conduit imports as the reason for the plant closure. Given this surge, CPA is urging the Biden administration to use its authority under Section 232 to re-impose the 25 percent tariff on steel conduit imports from Mexico.
Read CPA’s full letter here.
