On July 10 local time, the United States and Mexico announced a new measure aimed at preventing China and other countries from shipping products through Mexico to evade U.S. tariffs on steel and aluminum by implementing the North American Melting and Pouring steel standard.

Specific Content of the New Policy

According to U.S. President Bidens new policy, steel products imported from Mexico will be subject to a 25% U.S. Section 232 tariff unless documented as melted and poured in the U.S., Mexico or Canada. Similarly, aluminum products imported from Mexico must not contain primary aluminum smelted or cast in China, Russia, Belarus or Iran to avoid a 10% U.S. Section 232 tariff. Biden administration officials added that importers of these products into the U.S. will need to provide U.S. Customs and Border Protection with an analysis certificate showing the metals country of origin.

US - Mexico Joint Statement

U.S. President Biden and Mexican President López Obrador stated in a joint declaration that Mexico has agreed to require importers of cross-border steel products to provide more information about the products country of origin. The declaration said: The two countries will implement policies to jointly prevent tariff evasion on steel and aluminum and strengthen North American steel and aluminum supply chains. The two presidents also pledged that the U.S. and Mexico will enhance cooperation in the coming weeks and months to protect the North American steel and aluminum markets from unfair trade practices.,

Political Motives Behind

Reuters pointed out that Biden, in order to secure re-election in Novembers general election, has been courting votes from industrial union members, particularly those of the United Steelworkers. The new measures taken by the Biden administration were announced as fixing loopholes left by the Trump administration. In 2018, the Trump administration implemented Section 232 tariffs. In May this year, the Biden administration also increased Section 301 tariffs on metals from China to 25%.

Economic and Industrial Impact

U.S. Census Bureau data shows that in 2023, the U.S. imported very little steel from other countries via Mexico, accounting for only about 13% of the 3.8 million tons of steel imported from Mexico. However, a Biden administration official claimed that the new requirements are forward-looking and aim to prevent a potential surge in Chinese steel imports. The American Iron and Steel Institute applauded the Biden administrations new measures but stated that their effectiveness depends on whether Mexico provides accurate information about its imported metals.

The West hypes up overcapacity theory,

Reuters noted that as the Biden administration introduced new import requirements, the West has also deliberately hyped up the overcapacity theory against China, claiming that Chinas excess industrial capacity will flood global markets with products. Previously, in May this year, Biden increased tariffs on a range of Chinese goods, including steel and aluminum, electric vehicles, batteries, semiconductors, and critical minerals. At the same time, U.S. officials have grown increasingly concerned that Mexico could become a backdoor for China to access the U.S. market, leveraging Mexico for duty-free access under North American trade agreements.

Mexicos Response and Impact

On April 18 this year, Reuters cited three Mexican officials as saying that due to US pressure, the Mexican government will have to keep its distance from Chinese automakers and will not provide incentives such as low - cost public land or tax breaks to their invested electric vehicle factories. Chinese - branded cars account for nearly one - third of the total car sales in Mexico. Many Chinese automakers, including BYD, were previously reported to be in talks with the Mexican side about site selection.

The US Two - Party Competition to Pressure China

As the U.S. presidential election approaches, both Democratic and Republican parties are competing to hype up the so-called China threat, urging more economic and trade pressure on China, aiming to win votes from blue-collar workers with protectionist rhetoric. Previously, Republican Senator Marco Rubio proposed significantly higher tariffs on imported Chinese cars. Subsequently, three Democratic senators from auto-manufacturing states wrote letters urging the same, with one senior Democratic senator, Sherrod Brown, later escalating the call for President Biden to completely block Chinese electric vehicles from entering the U.S. market.

Chinas Response

He Yadong, a spokesperson for the Chinese Ministry of Commerce, responded by pointing out that Chinese cars are popular globally not through low - price dumping, but through technological innovation and excellent quality formed in fierce market competition. He Yadong said that in recent years, the US side has set up numerous obstacles, such as imposing tariffs, restricting participation in government procurement, and adopting discriminatory subsidy policies, which have seriously hindered Chinese cars from entering the US market. In sharp contrast, China has always kept its doors open to global automakers. US automakers fully enjoy the dividends of the large Chinese market. In fact, the sales volume of US - branded cars in China far exceeds that of Chinese - branded cars in the US.

He Yadong said that the US sides pursuit of trade protectionism, excessive politicization of economic and trade issues, and the building of higher and higher trade barriers impede fair competition and will also hinder the development of the US auto industry in the long run. It is hoped that the US side will respect the laws of the market economy and the principle of fair competition, correct non - market policies and practices, and create conditions for the fair competition and long - term development of the auto industry.