The
rapid increase of Mexican steel imports can have some dire consequences in the
near future for the American economy.
Several years ago the U.S. and Mexico agreed to a tariff deal that
would allow Mexican steel to be imported duty-free into the U.S., while also
under the terms that it would not exceed a certain number. Today, Mexican steel
imports have broken the conditions of the agreement by exceeding levels not seen in years.
Despite research showing that there is no demand that would
explain the sudden increase of steel imports from Mexico, critics say the Biden
administration has not acted to curb this issue. As a result, several members
of the U.S. Senate have penned a letter directed to
the Secretary of Commerce, Gina Raimondo, and U.S. Trade Representative,
Katherine Tai, demanding action and compliance of the agreement.
Without some enforcement or revision to the Section 232 tariffs
between the U.S. and Mexico, the result could be a permanent loss in jobs for
many Americans who are working in the steel manufacturing sector. The
effects of this could eventually lead to more job loss and U.S. dependence on
Mexican steel imports. There is also concern that the manufacturing of Mexican
steel isn’t directly made in Mexico.
Dale Crawford, the executive
director of the Steel Tube Institute, foresees
the consequences of the surge of these imports and what the outcome of that
could look like.
Crawford’s thoughts
“I’d like to talk about an issue that I think puts all of us at
risk here in the United States, and especially the companies that I represent
as well as their employees here in the United States. There is massive steel
import fraud going on right now. There are customs and border protections that
are not properly being upheld and there are tariffs and regulations that are
being ignored by the U.S. Trade Ambassador. There are issues with improper
labeling using the incorrect HTS code in order to circumvent the tariffs, and
ignoring the trade agreement we have with Canada and Mexico by companies
primarily importing product from Mexico and bringing product in that is beyond
what is allowed by a permitting process under the USMCA. Red tape tariffs and
regulations are simply being ignored.
This lack of action will negatively impact American steel
companies. It will ultimately lead to layoffs and plant closures. We’ve
actually already started to see some plant and facility closures.
Long term this becomes an issue for our national security. There
are good reasons that these tariffs have been put in place. There’s a good
reason we have the USMCA, which is the trade agreement we have with Canada and
Mexico, and we want to make sure that we can make these products in America in
a time of war that could come, we need the ability to make these products that
are critical to our military, critical to our critical infrastructure, and to
our ability to operate independently as a country. We need the ability and the
knowledge and the facilities to make these products and if we continue to have
products that are brought in that are skirting the tariff laws, that are being brought
in at massively undercutting the market in the United States, there isn’t an
ability to continue to employ the steel workers that have good jobs, that have
good benefits, and that most importantly, make products that are more
sustainable than the products that are brought in from other countries.
There’s a reason why it takes a little bit more money to make
some of these products in America. We need to make sure that we are making it
possible for these good corporate citizens in the United States economy to
continue to make these products that are critical to our infrastructure here in
the United States and our military.