President Biden on Wednesday announced new tariffs on imported steel and aluminum to keep cheap Chinese-produced metals out of the U.S. market and protect domestic production ahead of the November election.
The new tariffs will focus on steel and aluminum imports from Mexico, which is a transit route for many China-origin products as the U.S. reestablishes some direct supply chains from China in the aftermath of the pandemic.
Steel arriving from Mexico is subject to a 25% tax under Section 232 tariffs unless it is melted and cast in Mexico, Canada, or the United States.
Similarly, Mexican aluminum would be subject to a 10% tariff if it’s smelted or cast in China, Belarus, Iran or Russia, White House economist Lael Brainard told reporters on Tuesday.
The new tariffs were coordinated with Mexican President Andrés Manuel López Obrador, who issued a joint statement with Biden on Wednesday.
“Mexico is requiring importers to provide more information on the country of origin of their steel products in an effort to increase transparency of the origins of its imports. This measure follows Mexico’s recent increase in tariffs on steel from countries with which it does not have a free trade agreement,” the presidents said in a statement.
Administration officials said the new tariffs would apply to only a small fraction of total imports of the two critical metals from Mexico, though imports from the country have increased since 2019.
U.S. steel imports in 2023 will be 28.16 million tonnes, down 8.7% from 2022, according to January figures from the American Iron and Steel Institute, a trade group for North American steelmakers.
Of the 28.16 million tons, 3.8 million tons came from Mexico, and of that, 13 percent, or about 494,000 tons, was melted and cast outside the United States, Mexico and Canada, government officials said.
The amount of aluminum affected is fairly small: the U.S. imported 105,000 tonnes of aluminum from Mexico in 2023. Just 6% of that, or 6,300 tonnes, was smelted or cast in Russia, China, Belarus and Iran.
President Biden announced direct tariffs on Chinese-made steel and aluminum in April, but some commentators described it as a merely symbolic measure, as only 2% of U.S. steel imports and 3.5% of aluminum imports come from China.
Biden has cast himself as one of the most pro-labor presidents in U.S. history, and protecting American workers and industries has been a focus of his administration ahead of the November election.
The U.S. steel industry was thrown into turmoil last December when Japanese steelmaker Nippon Steel Corp. announced it would buy U.S. Steel for the astronomical price of $55 a share, a deal that drew sharp criticism from lawmakers.
U.S. Steel announced in May that the companies had received all non-U.S. regulatory approvals relevant to the transaction.
U.S. Trade Representative Katherine Tai, in her department’s statement on the tariffs, said domestic production of American steel and aluminum is “critical” to America’s national security interests.
