On July 10, local time, the United States and Mexico announced a new measure to implement the so-called North American melting and irrigation steel standard, aimed at preventing China and other countries from circumventing U.S. tariffs on steel and aluminum.

Context and contents of new measures

According to Reuters, the White House said that under a new policy implemented by U.S. President Biden, steel products imported from Mexico will be subject to 25% U.S. 232 clause tariffs unless there is documentation that steel products are melted and cast in the U.S., Mexico or Canada.

Biden administration officials added that the products arrived in the hands of U.S. importers and needed to provide the U.S. Customs and Border Guard with an analytical certificate to show the country of origin of the metal.

Bilateral Statements and Cooperation Intentions

In a joint statement, U.S. President Biden and Mexican President Lopez said Mexico had agreed to ask cross-border steel importers to provide more information about the countries of origin of these products.The two presidents said in a statement that “the two countries will implement policies jointly to prevent steel and aluminum tariffs from escaping and strengthen North American steel and aluminum supply chains,” and that they pledged that the United States will strengthen cooperation in the coming weeks and months, “protecting North American steel and aluminum markets from the effects of unfair trade practices.”

The Political Context of the New Policy

According to Reuters, Biden has been fighting for votes from members of industry unions, especially from the US Steel Workers Federation, in order to re-elect in November this year. Earlier, he opposed Japan’s largest steel manufacturer, Nippon Steel, to acquire US Steel, the U.S. steel manufacturing giant. U.S. Trade Representative Daejee declared the latest measures by the Biden government to “fix the gaps left by the Trump administration.” In 2018, the Trump administration implemented the “232 clauses” tariffs. In May this year, the Biden government also raised the “301 clauses” tariffs imposed on metals from China, the tax rate being raised to 25 percent.

Industry Responses and Challenges

The American Steel Association praised the new initiative of the Biden government, but the association said the effectiveness of the move depends on whether Mexico provides accurate information about its imported metals.The organization claimed, “We urge the U.S. government to continue to oversee to take more action to address many of the plans of steel traders to circumvent and evade U.S. trade laws, and to ensure that this new arrangement is enforced strongly and comprehensively.”

Economic measures against China

According to Reuters, when the Biden administration introduced new import demands, the U.S. West also deliberately speculated on China’s “excess capacity theory,” claiming that “China’s excess industrial capacity will flood large amounts of export products into the global market”.In May, Biden raised tariffs on a range of Chinese goods, including steel and aluminum, electric vehicles, batteries, semiconductors and key minerals.At the same time, U.S. officials were increasingly concerned that Mexico could become a “backdoor” to China’s entry into the U.S. market, using Mexico to gain duty-free access to the North American Trade Agreement.

Mexicos Response and Response

On April 18, Reuters quoted three Mexican officials as saying the Mexican government would be forced to stay at a distance from Chinese car companies due to U.S. pressure and not provide low-cost public land or tax deductions to their invested electric car factories.

Political Hypocrisy and Election Strategies

As the U.S. presidential election approached, both Democrats and Republicans fought for the so-called “China threat,” urging more economic and trade pressures on China to fight for workers’ blue collar votes through protectionist speeches. Previously, U.S. Republican Senator Rubio proposed a significant increase in tariffs on imported Chinese cars. Later, three Senate Democrats from the State of Automotive Manufacturing also wrote a letter urging this, including a senior Democratic senator, Sherrod Brown, to raise the door, demanding that President Biden completely block Chinese electric vehicles from entering the U.S. market.

Reaction from China

In response to the continued escalation of the U.S. trade war with China in the fields such as electric vehicles, Chinas Ministry of Commerce spokesman Hoi Dong previously replied that Chinas automobiles are widely popular in the world, relying not on low-price dumping, but on the technological innovations and over-hard quality formed in the fierce market competition. he said that the U.S. side promotes trade protectionism, politizes economic and trade issues, builds the walls of trade barriers higher and higher, hinders fair competition, and in the long run will also hinder the development of the U.S. auto industry itself.