Mexico Violations Continue to Degrade U.S. Industry and Employment
WASHINGTON — American domestic steel producers and organizations representing the industry and its workers today released a letter to President Joe Biden urging the administration to take immediate action to address Mexico’s ongoing and blatant violation of the 2019 joint steel agreement. In that agreement, the U.S. agreed to drop Section 232 tariffs and Mexico agreed to restrain steel export volume to 2015-17 levels. Mexico has clearly breached the agreement for the last several years, the U.S. chose to negotiate again rather than enforce the agreement, and the US steel sector has stagnated as a result.
The industry letter asks President Biden to end negotiations and take action to impose quotas or tariffs to enforce the deal. Mexico has refused to abide by the agreement because its companies are profiting from the violation and are lobbying the Obrador administration to prevent it from coming to an agreement with the Biden administration.
The letter was signed by the Coalition for a Prosperous America, Optimus Steel, Zekelman Industries, Atkore, the Committee on Pipe and Tube Imports (CPTI), and the Steel Tube Institute. The signatories demand that President Biden unilaterally act by re-imposing tariffs or quotas since Mexico refuses to limit its shipments. Read the letter here.
A recent economic analysis from CPA found Mexico’s increased shipments now account for over 87% of U.S. imports of steel conduit and import levels are 472% over the historic baseline. For steel conduits specifically, imports from Mexico reached 472% above the 2015-2017 baseline period, based on Panjiva data. Initial 2024 trade data suggested the surge will rise to 692% over the baseline in 2024.
“As leaders representing America’s domestic steel producers and the millions of American workers that are employed as a result of our industry, we write with increased urgency to request that your administration take immediate action to address Mexico’s ongoing and blatant violation of the 2019 joint steel agreement,” the letter states. “We support your recent action to protect the U.S. steel and shipbuilding industry from China, but that action is insufficient. Mexico’s ongoing breach is causing far more harm to our businesses, our investment, and our workers.”
In April, the Biden administration announced new actions to protect America’s steel and shipbuilding industries from China’s predatory trade activity. However, the Biden administration’s announcement again failed to include direct action to address Mexico’s continued violation of the 2019 joint steel agreement.
“U.S. steel product manufacturing employment stalled due to the import surge and has now started to fall,” the letter continues. “The huge strain on local U.S. steel product manufacturers from these imports is causing financial stress that is diminishing market share. It is also leading toward more plant and production line closures as well as job losses. The 2019 agreement provided for consultations in the event of a breach. Despite your administration engaging in those consultations, it is clear that those talks have reached an unproductive stalemate. It is time for your administration to take action and enforce the agreement with tariffs and quotas designed to roll back the surge of imports to the historic baseline that Mexico agreed to.”
Last month, United States Trade Representative (USTR) Katherine Tai met with Mexico’s Secretary of Economy Raquel Buenrostro to discuss the Mexican steel surge. CPA applauded Ambassador Tai for securing a commitment from Secretary Buenrostro to reinstate Mexico’s export monitoring regime. But Mexico continues to delay and assist its companies’ who are gaining market share and profits as they violate the agreement.
The Mexican Steel Surge is Harming CPA Member Companies
CPA member companies producing steel products have facilities at risk across 34 states, including Ohio, Pennsylvania, Kentucky, Georgia, Florida, Texas, Arizona, Illinois, Washington, Idaho, Oregon, Utah, Nevada, California, New Mexico, Kansas, Arkansas, Mississippi, Louisiana, South Carolina, North Carolina, West Virginia, Indiana, Iowa, Michigan, Virginia, Alabama, New Hampshire, Maryland, Massachusetts, Connecticut, Rhode Island, and New York.
These plants are often in poor and underserved communities that provide jobs paying wages at more than double the regional average. The continued surge of Mexican steel imports has already had a devastating impact on U.S. manufacturers and workers. The surge in imported Mexican steel conduit led directly to the closure of Zekelman Industries’ Long Beach mill, with the loss of 150 jobs. Wheatland Tube, a steel conduit manufacturer, announced it 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.
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