Biden Administration Imposes Tariffs on Mexican Steel and Aluminum

The Biden administration is introducing tariffs on steel and aluminum from Mexico to prevent China from circumventing import taxes. The move aims to address evasions by China and strengthens trade rules. Steel and aluminum imports will see 25% and 10% tariffs respectively. This decision also has political implications ahead of the upcoming elections.

The Biden administration is imposing tariffs on steel and aluminum shipped from Mexico that were made elsewhere in an effort to prevent China from circumventing import taxes by routing goods through one of the United States' closest trading partners.

Lael Brainard, director of the White House National Economic Council, said the tariffs announced Wednesday are part of an agreement with Mexico through section 232 of the Trade Expansion Act, which applies to imports that could threaten US national security.

Steel that is not melted or poured in Mexico will now face a 25% tariff, while aluminum will be subjected to a 10% tariff.

The new taxes on steel aim to curb the evasion of tariffs by China, the world's dominant producer of more than half of the globe's steel. The aluminum taxes would also target production from China, Belarus, Iran, and Russia.

This decision is seen as a clear political maneuver against Republican Donald Trump, President Joe Biden's predecessor, and his likely opponent in the November election. Brainard emphasized that Trump could have taken similar actions but did not.

"The president is taking action to close loopholes left by his predecessor that allowed China to circumvent trade rules," she said.

However, the financial impact of the tariffs is expected to be modest, given the volumes of steel and aluminum being routed this way through Mexico.

Administration officials noted that the US imported 3.8 million tonnes of steel last year from Mexico, with 13% of that having been processed outside Mexico. Similarly, the US imported 105,000 metric tonnes of aluminum from Mexico, where only 6% was processed outside that country.

Nevertheless, the issue remains politically significant. Sen. Sherrod Brown, D-Ohio, has called for halting Mexican steel imports, citing it as a threat to US steelworkers and a way to evade tariffs.

Brown is up for reelection against Republican Bernie Moreno, a wealthy businessman from Cleveland. Once a political bellwether, Ohio has voted for Trump in the last two presidential elections.

The tariffs take effect Wednesday with the announcement.

(With inputs from agencies.)