US targets Chinese steel exports with tariffs on shipments via Mexico

The US will apply national security tariffs to some steel and aluminium imports from Mexico in a bid to stop Chinese metal entering the US across the southern border.

The White House said duties of 25 per cent would apply to any steel entering the US from Mexico that was not melted and poured in North America, while aluminium from Mexico that contained primary smelt from China, Belarus, Iran or Russia would face tariffs of 10 per cent. 

The move, which follows a series of tariff increases on Chinese goods, is an attempt by the Biden administration to shore up support in former industrial heartlands, where he is losing ground to Republican rival Donald Trump in this year’s presidential election.

“Chinese steel and aluminium entering the US market through Mexico evades tariffs, undermines our investments and harms American workers in states like Pennsylvania and Ohio,” said Lael Brainard, Biden’s economic adviser.

Biden earlier this year also moved to protect US Steel from purchase by Japanese-owned Nippon Steel — a move Biden characterised as siding with American steelworkers. US Steel is based in Pittsburgh, in the pivotal swing state of Pennsylvania.

The US already has tariffs of 25 per cent in place on imports of steel and aluminium from China after the Biden administration tripled the US tariff rate on those imports in May. But the new levies would target shipments that enter the US after coming through Mexican ports.

The White House said the actions were being taken jointly with Mexico, which would ask its own importers to provide more information about what country their steel products were coming from. 

US trade representative Katherine Tai said the move was “good news” for both the US and Mexico’s steel and aluminium workers. 

US officials said the US imports about 3.8mn tonnes of steel from Mexico, with only 13 per cent melted and poured outside of the North American region and now affected by the new tariffs. 

For aluminium, the tariffs will apply to only 6 per cent of the 105,000 tonnes of imported aluminium from Mexico. 

Brainard said China was producing “more steel than China or the world can easily absorb”, and that subsidies were leading to “export surges” and “artificially low prices”.

In May, the Biden administration unveiled a suite of new tariffs targeting imports from China in the clean technology sector, including a quadrupling of the levy on electric vehicle imports to 100 per cent, a doubling of the rate on solar cells to 50 per cent and a doubling of tariffs on Chinese chips from 2025.