United States and Mexico united against tariff evasion in steel and aluminum

The United States and Mexico are intensifying their fight against tariff evasion in the steel and aluminum industry, particularly by China and other countries, through new measures implemented in an effort to ensure the integrity of supply chains in North America. The Biden administration has announced a policy that will affect steel imports from Mexico, which will now be subject to 25% tariffs under "Section 232" unless it can be demonstrated that the material has been melted and poured in the United States, Mexico, or Canada. Additionally, aluminum imports from Mexico must avoid containing primary aluminum from China, Russia, Belarus, or Iran to avoid 10% tariffs under Section 232. These measures require importers in the United States to submit a certificate of analysis to Customs and Border Protection detailing the country of origin of the metals. Together, the United States and Mexico will work to prevent tariff evasion and strengthen supply chains in the region, as expressed by Presidents Biden and López Obrador in a joint statement. One of the reasons behind these actions lies in concerns about China's industrial overcapacity, which has flooded global markets with exports, exacerbating competition and weakening domestic demand. Additionally, the aim is to prevent Mexico from becoming a backdoor for Chinese products to enter the U.S. market, taking advantage of preferential access through the USMCA. In a context where the U.S. administration has increased tariffs on various strategic Chinese products, such as steel and aluminum, efforts are being made to close any loopholes that allow for the evasion of these measures. The new policies aim to address gaps left by previous administrations and to prevent an anticipated increase in imports, especially at a time when steel-consuming sectors in China are facing challenges. While steel imports from Mexico from other sources were relatively low in previous years, these preventive measures seek to ensure that Mexico provides accurate information about the metals it imports. The American Iron and Steel Institute has supported these actions to close off routes for Chinese products to enter the U.S. market, although it has called for firm implementation and the adoption of additional measures to address potential evasion schemes. Biden and López Obrador have pledged greater cooperation in the coming weeks and months to protect North American steel and aluminum markets from unfair trade practices. The transition of power in Mexico with Claudia Sheinbaum assuming office on October 1 will also be crucial for the continuity of these policies and bilateral cooperation on trade issues.