Trade Cases

Mexico Avoids Tariff by Agreeing to Monitor Exports

Written by Tim Triplett

September 1, 2020

In response to U.S. complaints of recent surges, Mexico has agreed to strictly monitor exports of standard pipe, mechanical tubing and semifinished products through June 1, 2021. In exchange, the U.S. will maintain Mexico’s exemption from the Section 232 national security tariffs, said U.S. Trade Representative Robert Lighthizer in a statement on Monday. Section 232 imposes a 25 percent duty on imports of finished and semifinished steels from most other nations. 

As a result of consultations to analyze recent volumes of imports of the three steel products, the U.S. will maintain Mexico’s tariff-free treatment, said Mexico’s Secretariat of the Economy in a statement on Monday. For its part, Mexico will establish an export monitoring regime for these products until next June. Both countries will consult in December to assess the trade flow of these products in light of current market conditions

Lighthizer praised the Mexican government for their cooperation. “While the COVID-19 pandemic has challenged both of our countries in unprecedented ways, it has also underscored the importance of the strong economic partnership between the United States and Mexico and the need for close coordination to address common challenges. Our successful consultations on steel prove it is possible for us to work together to find creative solutions that serve the interests of workers and businesses in both countries.”

(Editor’s note: See Leibowitz on Trade for further commentary on this subject.)

Tim Triplett

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Price: Should billions in Section 232 revenue go to foreign manufacturers or to the American people?

Do we want the benefits of the Section 232 tariffs to flow to the bottom lines of foreign steel and aluminum producers or to the US government and, ultimately, domestic manufacturers and their workers? In our view, the answer is simple. Section 232 exceptions do nothing more than lead to underserved profits for foreign manufacturers who are harming the US industrial base. That revenue could be used to pursue the Trump administration’s other policy priorities - such as deficit reduction or expanded tax cuts.