Photo: Wiki Commons
The President of the United States, Joe Biden, revealed on Wednesday that the United States will collaborate with its southern neighbors in Mexico to prevent China from circumventing U.S. tariffs by importing steel and aluminum through Mexico.
Biden emphasized the importance of this bilateral coordination with his Mexican counterpart Andrés Manuel López Obrador in addressing concerns about China’s trade practices. “We know that China is still willing to introduce steel and aluminum through Mexico to evade tariffs,” stated the U.S. president, speaking at a campaign event in Pittsburgh, Pennsylvania.
In an effort to counter these practices, Biden announced that the U.S. will triple the existing tariffs on steel and aluminum from China. Currently, the tariff sits at 7.5%, and this measure would increase it to 22.5%. However, this increase still needs to be reviewed by the Office of the United States Trade Representative (USTR).
The White House also reported that an investigation will be conducted into Chinese trade practices in sectors such as naval and maritime construction and logistics, which could result in the imposition of more tariffs.
This reflects Biden’s strategy to garner support from the American working class, a sector attracted to protectionist policies implemented during the previous administration. During his tenure, former President Donald Trump triggered a trade war with China by imposing tariffs on Chinese products, which strained global economic growth.
In addition to this announcement, there is a further issue related to the incentives offered to Chinese manufacturers, as Mexico finds itself at a crossroads due to external pressures from the United States to restrict any support to Chinese manufacturers.
Mexican officials have maintained a firm stance by refusing to provide incentives such as subsidized public lands or tax exemptions to Chinese automakers, arguing the need to prevent Mexico from becoming a backdoor for Chinese vehicles to enter the U.S. market.
Despite local enthusiasm to attract more automobile production to the country and create jobs, caution prevails to avoid tensions with the United States and maintain the integrity of the United States-Mexico-Canada Agreement (USMCA).
Furthermore, addressing concerns about a potential trade conflict with China, Biden assured that “there will be no trade war,” emphasizing his commitment to addressing these issues diplomatically and collaboratively.
Biden’s announcement has been endorsed by unions in the steel sector and trade associations, who have accused China of flooding the U.S. market with cheap steel, harming domestic producers.
Despite the support, the measure is largely symbolic, as only 3% of U.S. steel imports come from China. However, this action marks a significant step in U.S. trade policy and its relationship with China.
The collaboration between the United States and Mexico on this issue underscores the importance of international cooperation in addressing global economic challenges and ensuring fair and equitable trade for the region.
Know the main source:
EU trabaja con México para evitar que China se salte aranceles con triangulación: Biden | Forbes México (2024, abril 17)https://www.forbes.com.mx/eu-trabaja-con-mexico-para-evitar-que-china-se-salte-aranceles-con-triangulacion-biden/
Other related sources:
México no dará incentivos a fabricantes chinos de autos eléctricos tras presión de EU | El Economista (2024, abril 18)
Al triplicar los aranceles al acero de China, Biden colabora con AMLO | Vanguardia MX (2024, abril 17)