Biden Administration adjusts tariffs on Mexican steel imports

In brief

What happened?

In a proclamation issued July 10, President Joe Biden announced that the United States will implement a “melt and pour” requirement for imports of steel articles that are products of Mexico and will reinstate the Section 232 tariff at a rate of 25% on imports of steel articles and derivative steel articles that are products of Mexico but are melted and poured in a country other than Mexico, Canada, or the United States. To be eligible for importation into the United States free from Section 232 tariffs, steel articles and derivative steel articles that are products of Mexico must be melted and poured in Mexico, Canada, or the United States. 

This action is the latest in a series of actions taken by the United States since then-Commerce Secretary Wilbur Ross’s 2018 report on the investigation into the effect of imports of steel mill articles (steel articles) on the national security of the United States under Section 232 of the Trade Expansion Act of 1962, as amended. That report concluded that steel articles are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States.

According to the July 10 proclamation, Commerce Secretary Gina Raimondo recently informed President Biden that domestic steel producers’ capacity utilization remains below the target 80% capacity recommended in the 2018 report, and that imports of steel articles from Mexico have increased significantly compared to their levels at the time of the first presidential proclamation issued after the 2018 report. That proclamation imposed a 25% tariff on steel articles and derivative steel articles imported from all countries except Canada and Mexico. 

Secretary Raimondo concluded that these developments indicate the need for further action under Section 232 with respect to such steel imports.

Why is it relevant?

The latest action by President Biden seeks to address the recent increase in “transshipment” via Mexico of steel articles and derivative steel articles from third countries from which direct shipments of such articles to the United States have become economically inefficient due to the imposition of Section 232 tariffs, Section 301 tariffs, and various product-specific antidumping and countervailing duties.

Action to consider

Taxpayers that import articles made of or comprising steel from Mexico should determine the impact of these adjustments on their supply chains.