Home Economy Biden Announces Tariffs on Chinese Metals Routed Through Mexico

Biden Announces Tariffs on Chinese Metals Routed Through Mexico

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The Biden administration took steps on Wednesday to prevent China from circumventing American tariffs on Chinese steel and aluminum by routing those imports through Mexico.

The administration said it would impose tariffs on imports of Mexican metals that are partially made in China. American officials said the move would close a trade loophole that has allowed cheap, state-subsidized Chinese metals to circumvent existing U.S. tariffs.

The United States will now impose a 25 percent tariff on Mexican steel that is melted or poured outside of North America before being turned into a finished product. Previously, that steel would have entered the country duty free.

Mexican aluminum coming into the United States will face a tariff of 10 percent if it contains metal that has been smelted or cast in China, Belarus, Iran or Russia, said Lael Brainard, the director of the White House’s National Economic Council.

Mexico, which recently increased its own tariffs on steel and aluminum from certain countries, will require importers to provide more information about where their steel products come from, the announcement said.

Officials in the Biden administration said the United States wanted to protect American factories that produce steel and aluminum, including those that have recently received new investments from government funds.

“Chinese steel and aluminum entering the U.S. market through Mexico evades tariffs, undermines our investments, and harms American workers in states like Pennsylvania and Ohio,” Ms. Brainard said.

“When China’s export surges harm our markets, whether directly or via other countries, we will act,” she added.

Administration officials said that 3.8 million tons of steel came into the United States through Mexico last year, and that overall steel imports from Mexico had been on the rise. About 13 percent of Mexican steel imports into the United States last year were melted or poured outside of North America, according to the White House.

Biden administration officials said they had worked closely with the Mexican government on the measure, and that they had been clear with Chinese officials both publicly and privately about their concerns about unfair Chinese trade practices. In visits to China earlier this year, Treasury Secretary Janet L. Yellen and Secretary of State Antony J. Blinken had raised the issue of industrial overcapacity with the Chinese government.

In May, the Biden administration tripled tariffs on Chinese steel that is imported directly into the United States. But the measure was mostly symbolic, given that the United States has long had high tariffs on Chinese metals, largely blocking direct imports.

China produces roughly half of the world’s steel, consuming much of it domestically but exporting the rest. The Chinese property sector, which is a major consumer of steel, has been struggling with a downturn in recent years, though the Chinese auto sector, another major consumer, has seen its global exports surge.

The United States will separately continue discussions with Mexico about more general surges in imports of steel from the country, officials said. American steel companies and autoworkers complained that an increase in steel imports from Mexico have put their factories at risk.

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