Bipartisan Group of Senators Demands Action on Surge of Mexican Steel Imports
Fourteen senators, led by Sens. Sherrod Brown, D-Ohio, and Tom Cotton, R-Ark., demanded that the Biden administration "set a clear deadline" for Mexico to enforce its 2019 joint agreement on steel and aluminum. That agreement lifted 25% tariffs on Mexican steel but said that the countries would monitor for export surges.
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In 2020, Mexico set new export permit requirements for semifinished steel, standard pipe and mechanical tubing (see 2008310045).
The same group of senators complained about a surge in Mexican steel exports in February (see 2302160001) and asked the administration to address it.
This time, the lawmakers urged the administration "to take aggressive action to counter the increase in Mexican steel imports" if Mexico doesn't prevent export surges. They say Mexico is in violation of the agreement. "This breach, and the resulting surge threatens our manufacturing base and American national security and demands immediate action from the administration," they wrote Dec. 13. The senators said that in 2022 120% more semifinished steel and long products were imported from Mexico than before the Section 232 tariffs in 2018. Overall, they said, steel imports from Mexico are up 73% across five years.
However, the steel imports continued to increase from Mexico even during 2018, because Mexican wages are low enough that it was still cheaper than domestic production, an analyst said (see 1905300026).
The letter, signed by senators across the ideological spectrum, from the South, Northeast and Midwest, complained that Grupo Simek is closing plants in Ohio and New York and moving that production to Mexico. The letter was sent to National Security Adviser Jake Sullivan, although the Office of the U.S. Trade Representative is in charge of enforcing the agreement and the tariffs the agreement lifted were levied through a Commerce Department process. A USTR spokesperson noted that USTR Katherine Tai pressed the issue with Mexico's economy secretary in September.
A readout of that call said the two officials discussed how important it is for Mexico to address U.S. concerns about "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." They "agreed on the importance of enhancing steel and aluminum trade monitoring efforts and instructed their teams to work towards the reinstatement of Mexico’s export monitoring regime."