Steel is one of the most vital global industries. It’s fundamental to both industrial growth and national security. But now, America’s steel supply chain workers are facing wage cuts and layoffs. Much of that is due to one problem — the Mexican government’s refusal to follow a 2019 promise to halt surging steel exports to the United States.
It’s a clear breach of recent negotiations between the two countries. Since Mexico refuses to honor its commitments, Washington should reimpose tariffs on Mexican steel products.
For decades, my company has manufactured steel pipe and tubing throughout the United States — including electrical conduits, water pipes and structural tubing. This steel is used in data centers, electric vehicle production and commercial buildings, and is the primary component of solar energy installations.
In the last decade, one of the most significant threats our workforce faced was a surge in steel imports. The Trump administration imposed “Section 232” emergency tariffs on steel imports in 2018. That proved to be game-changing since it helped us to rebuild our business and pay our workers fairly.
Canada and Mexico vigorously protested these tariffs — and responded with counter-tariffs. However, in May 2019, the United States reached a deal with both countries to hold the volume of their steel exports to pre-existing levels. In return, the United States dropped the tariffs.
Unfortunately, Mexico has flagrantly increased its exports instead of honoring its promise to limit steel shipments. Mexico’s steel exports are soaring to record levels.
The problem has grown so severe that a bipartisan group of senators recently sent a letter to U.S. Trade Representative Katherine Tai urging action. The letter explains that the volume of annual iron and steel imports from Mexico has increased 73 percent since the surge days of 2015-2017. Even more worrying is that imports of semi-finished steel and steel products from Mexico are up 120 percent. And steel conduit imports have risen by an even more astounding 577 percent.
Mexico’s blatant disregard for its commitments to the United States is reminiscent of China’s brazen violations of the “Phase One” agreement negotiated in 2020. In that instance, China pledged to buy more U.S. goods in exchange for reducing U.S. tariffs. But Beijing reneged and simply disregarded its obligations.
Mexico is now doing the same thing — breaching its commitments in believing that the United States will do nothing. After the 2018 steel tariffs were imposed, my company was able to get back on solid footing. As soon as business was back on line, we started paying bonuses and doing whatever we could to reward our employees for their hard work.
Now, we’re struggling against the very surges of steel imports that Mexico specifically pledged not to send. And our workers have been hit hard. We’ve already closed one plant in California and let go of 145 workers. These were high-paying manufacturing jobs with full benefits. For our remaining workers, the bonuses we once paid are now gone.
When the United States imposed tariffs on steel in 2018, it was for national security reasons. The idea was to protect the core of America’s national defense and industrial supply chains. Since then, the COVID pandemic has demonstrated that we must also protect crucial supply chains — from computer chips and essential medicines to medical equipment and military hardware.
When we consider the threats posed by Russia, China and other adversaries, it’s clear that the United States will always need the ability to produce various commercial products. However, the Biden administration is failing to enforce Mexico’s breach of a negotiated trade agreement. That harms America’s wider efforts to Build Back Better.
To get American industry back on its feet, the administration must reimpose Section 232 tariffs on Mexican steel. Otherwise, America’s clean energy revolution could be made in Mexico and China.