Groups representing steel and aluminum manufacturers say the United States needs to do more to combat evasion of U.S. trade laws. They’re not the only ones feeling the pain.
In May, the Biden administration New tariffs to be introduced The tariffs target a large number of imported products from China, including strategically important industries such as steel, aluminum, electric vehicles, semiconductors, solar cells and batteries.
As At that time weBut it was undoubtedly the right thing to do. For decades, the Chinese government has used a host of unfair practices to dominate global industries and drive competitors out of business. The tariffs counter that unfair practice and help prevent artificially cheap goods from flooding the U.S. market and driving American manufacturers out of business. For example, the tariffs: There was no surge There are no cheap Chinese cars available in the US market (yet).
But China knows how to play the long game and has already implemented strategies to circumvent U.S. tariffs and enter the U.S. market.
there is Growing body of evidence China is using third countries like Mexico and Vietnam to circumvent U.S. trade measures. Mexico is currently the largest exporter of goods to the United States, but many of those goods are either manufactured by Chinese companies operating in Mexico or simply imported from China, using Mexico as a conduit to the U.S. market.
This trend is especially evident in the automotive industry, CNN reports. reportBut the steel and aluminum industries are also feeling the effects of China’s circumvention measures and are now calling on the Office of the United States Trade Representative (USTR) to take action against Mexico and other countries that enable these unfair trade practices.
in Public comments submitted to the AgencyKevin Dempsey, president of the American Iron and Steel Institute (AISI), wrote that his organization, which is made up of steelmakers across the U.S., supports the increased tariffs on Chinese steel announced by the Biden administration in May, but warned that as currently structured, the tariffs would only apply to a small percentage of steel imports from China.
To maximize the impact of this trade measure (which is crucial given China’s steel overcapacity), the tariffs should be amended to “apply to all steel products whose original raw steel is melted and cast in China, regardless of the country of final processing.”
Dempsey continues: “Updates to the rules of origin for Section 301 tariffs on steel products will more accurately reflect China’s influence on global steel markets and take into account Chinese steel exports to third countries that are further processed before being exported to the United States.”
AISI is not the only group calling for trade measures to counter China’s evasion of U.S. trade tariffs. We made a similar suggestion in our comments to USTR.noted that tariffs on Chinese aluminum have helped stem the flow of unfairly traded product into the U.S. market, resulting in billions of dollars of U.S. investment in the aluminum industry, including $3 billion since the beginning of 2023.
But Chinese manufacturers have used third countries, such as Mexico, to avoid tariffs and allow U.S. industries to grow, the association warned.
“While Chinese producers and exporters of these products have reduced their shipments to the United States, Chinese exports to third countries have increased significantly as products previously exported to the United States have been diverted to other markets,” wrote Will Brown, the association’s vice president of government relations and international programs.
Countering China will require a new strategy, Brown argues.
“Ambassador Tai has frequently spoken out about the need for ‘new tools’ to ensure that free markets and free trade regimes are not abused by those seeking to take advantage of such conditions,” Brown wrote. “In that regard, we urge you and your colleagues to seriously consider imposing Section 301 tariffs on aluminum-intensive products entering the United States from third countries, including Chinese aluminum. While any such measures would be new and novel, we urge such measures to address the importation into the United States of aluminum-intensive products, including Chinese aluminum, and aluminum products that are harmful to our domestic aluminum industry and economy.”
