On July 10 local time, the United States and Mexico announced a new measure aimed at preventing China and other countries from circumventing U.S. tariffs on steel and aluminum by shipping products through Mexico, through the implementation of the "North American Melt and Pour" steel standard.

Specific Content of the New Policy

According to the new policy by U.S. President Joe Biden, steel products imported from Mexico will be subject to a 25% U.S. "Section 232" tariff unless documentation proves they were 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 the 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 a certificate of analysis indicating the metal's country of origin.

US - Mexico Joint Statement

U.S. President Joe Biden and Mexican President Andrés Manuel López Obrador stated in a joint declaration that Mexico has agreed to require importers of cross-border steel products to provide more information on the country of origin for these products. The declaration said: "The two countries will implement policies to jointly prevent tariff evasion on steel and aluminum and strengthen the North American steel and aluminum supply chain." 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 in order to secure re-election in the November election this year, Biden has been actively courting votes from industrial union members, particularly those of the United Steelworkers. The new measures taken by the Biden administration this time are claimed to "fix the loopholes left by the Trump administration." In 2018, the Trump administration implemented "Section 232" tariffs. In May of this year, the Biden administration also raised the "Section 301" tariffs on metals imported from China, increasing the rate to 25%.

Economic and Industrial Impact

According to data from the U.S. Census Bureau, in 2023, the United States imported very little steel from Mexico that originated elsewhere, accounting for only about 13% of the 3.8 million tons of steel imported from Mexico. However, an official from the Biden administration 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, an industry group, "applauded" the Biden administration's new measures but stated that their effectiveness depends on whether Mexico provides accurate information about its imported metals.

The US and the West hype up the "overcapacity narrative"

Reuters pointed out that as the Biden administration introduced new import requirements, the U.S. and the West have also deliberately hyped up the "overcapacity narrative" against China, claiming that "China's excess industrial capacity will flood global markets with large quantities of exported products." Earlier, in May of this year, Biden increased tariffs on a range of goods from China, including steel and aluminum, electric vehicles, batteries, semiconductors, and critical minerals. Meanwhile, U.S. officials have grown increasingly concerned that Mexico could serve as a "backdoor" for Chinese products to enter the U.S. market, leveraging Mexico to gain duty-free access under the North American trade agreement.

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 the Democratic and Republican parties are vying to hype up the so-called "China threat," urging more economic and trade pressure measures against China, aiming to win votes from the blue-collar worker demographic with protectionist rhetoric. Previously, Republican Senator Marco Rubio proposed significantly increasing tariffs on imported Chinese cars. Subsequently, three Democratic senators from automobile-manufacturing states wrote letters urging the same action. Among them, senior Democratic Senator Sherrod Brown later escalated his stance, calling on President Joe 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.