In an attempt to bolster U.S. steel production and reduce dependency on foreign steel, President Joe Biden has imposed new restrictions on steel imports from Mexico. As of July 10, 2024, all steel items imported from Mexico must be melted and poured within North America—specifically, in Mexico, Canada, or the United States—to qualify for Section 232 tariff exemptions. This directive aims to close loopholes that allowed steel originally produced outside of North America, particularly in China, to be trans-shipped through Mexico and thus avoid existing tariffs.
The President’s proclamation, responding to domestic industry concerns, introduces a 25% tariff on steel not meeting these new criteria. This measure addresses the undercutting effects of these imports on U.S. steel production, which has struggled to achieve the recommended 80% utilization threshold necessary for optimal industry health.
Commerce Secretary Gina Raimondo supported the move, citing the threat posed by large volumes and certain conditions of steel imports to U.S. national security. The increase in steel imports from Mexico, particularly since the issuance of Proclamation 9894 by former President Donald Trump in 2019, has been significant.
The White House statement outlines the administration’s goal to restrain steel imports from Mexico to prevent further impairment of U.S. national security by reducing transshipment activities and discouraging excessive steel capacity and production abroad.
The new rule mandates that importers must verify the melted-and-poured origin of their steel and derivative steel items to U.S. Customs and Border Protection, a regulation that will be implemented as soon as practicable.
