Steel Caucus Urges Action on Mexican Imports

The CSC claims the imports are in violation of the US and Mexican 2019 Joint Statement on Section 232 Duties on Steel and Aluminum, according to a letter addressed to Commerce Secretary Gina Raimondo and USTR Katherine Tai on Wednesday.

The US lifted 25% Section 232 duties on Mexican steel imports in May 2019, ahead of the US-Mexico-Canada Agreement (USMCA) going into effect in 2020. 

“Over the past several months, members of the domestic steel industry and the United Steelworkers have brought to our attention the economic harm that this breach has caused on workers and our ability for steel to support our national economy and our national security,” the letter said.

The CSC said that total steel imports from Mexico rose by ~72% in 2022, with increases across major product lines, including rebar, hot-rolled, galvanized sheet, carbon and galvanized wire, wire rod, pipe and tube, steel conduit, semi-finished, and other products.

As an example, the letter claims that Mexican rebar imports were more than 3,000% greater by volume in 2022 than their 2015-2017 annual average.

“Additionally, the Mexican steel industry appears to be taking advantage of its status under the US-Mexico agreement to export to our nation steel that was produced in countries that remain subject to Section 232 measures,” the letter said.

The CSC stated that reports and data from the US Steel Import Monitoring and Analysis System show that significant volumes of steel melted and poured in countries such as Brazil, South Korea—and even Russia—have entered through Mexico to the US, duty free.

“The whole point of the agreement was to prevent the US from being a dumping ground for Mexican and global overcapacity that harms our producers, workers, and communities,” the letter said.

Finally, the letter states that “the Mexican refusal to honor the agreement has weakened the domestic industry, with production and capacity utilization down significantly this year.”

“Therefore, we urge you and the Biden administration to immediately begin consultations under the 2019 Agreement to address this surge of Mexican steel,” the CSC said. “If the Mexican government refuses to take swift action to remedy this matter, we strongly encourage the administration to consider other mechanisms to ensure compliance.”

The CSC is a bipartisan group that includes over 100 members of Congress from steel-producing communities.

In February, 13 US senators signed a letter to USTR and Commerce urging action on Mexican steel imports. 

By Ethan Bernard, ethan@steelmarketupdate.com