Issue 28, 2024 - This week's editorial: US eyes China tariff circumvention, EU safeguard puzzles

Big news can be hard to come by in the summer months, but Joe Biden delivered last week. The US President ordered that steel items imported from Mexico must be melted and poured in Mexico, Canada or the US to be eligible for Section 232 exemptions. This effectively slaps a 25% tariff on any steel trans-shipped through Mexico that originated in China or other sources outside North America.

The main target of the move is China, which has been accused by the US of shipping intermediate steel products to Mexico for further processing before they are delivered on to the US, thereby effectively circumventing tariffs. This has resulted in US domestic steel production utilisation rates remaining below the recommended 80% threshold, the Biden administration argues.

Mexico is on board with the move and said it will introduce its own stipulation that importing companies must provide more information about the country of origin of steel products, in order to improve trade transparency under the US-Mexico-Canada Agreement (USMCA).

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