On July 10, local time, the United States and Mexico announced a new measure aimed at preventing China and other countries from transporting products through Mexico to evade US tariffs on steel and aluminum by implementing the “North American Melt and Pour” steel standard.

Specific Content of the New Policy

According to US President Bidens new policy, unless there is documentation proving that the steel products are melted and cast in the United States, Mexico, or Canada, steel products imported from Mexico will be subject to a 25% US “Section 232” tariff. Similarly, for aluminum products imported from Mexico to avoid the 10% US “Section 232” tariff, they must not contain primary aluminum smelted or cast in China, Russia, Belarus, or Iran. Biden administration officials added that when these products reach the importers in the United States, they will need to provide an analysis certificate to the US Customs and Border Protection to show the country of origin of the metal.

US - Mexico Joint Statement

US President Joe Biden and Mexican President Andrés Manuel López Obrador said in a joint statement that Mexico has agreed to require cross - border steel product importers to provide more information on the country of origin of these products. The statement said, The two countries will implement a joint policy to prevent evasion of steel and aluminum tariffs and strengthen the North American steel and aluminum supply chain. The two presidents also promised that the US and Mexico will strengthen 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 general election this year, Biden has been seeking the votes of industrial union members, especially those of the United Steelworkers. The new measures taken by the Biden administration are claimed to be plugging the loopholes left by the Trump administration. In 2018, the Trump administration implemented the Section 232 tariffs. In May this year, the Biden administration also increased the Section 301 tariffs on metals from China, raising the tax rate to 25%.

Economic and Industrial Impact

Data from the US Census Bureau shows that in 2023, the amount of steel imported by the US from other places through Mexico was very small, 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 requirement is forward - looking and aims to prevent a possible surge in Chinese steel imports. The industry organization, the American Iron and Steel Institute, appreciated the new move by the Biden administration, but the institute said that the effectiveness of this move depends on whether Mexico provides accurate information about its imported metals.

The US and Western Countries Hyping of the “Overcapacity Theory”

Reuters pointed out that as the Biden administration introduced new import requirements, the US and the West have also been deliberately hyping up the overcapacity theory against China, claiming that Chinas excessive industrial capacity will flood the global market with a large number of exported products. Previously, in May this year, Biden increased tariffs on a series of goods from China, including steel and aluminum, electric vehicles, batteries, semiconductors, and critical minerals. At the same time, US officials are increasingly worried that Mexico could become a backdoor for China to enter the US market, using 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 US presidential election approaches, the Democratic and Republican parties are vying to hype up the so - called China threat and urge more economic and trade pressure on China, aiming to win the votes of the blue - collar working class through protectionist remarks. Previously, US Republican Senator Marco Rubio proposed a significant increase in tariffs on imported Chinese cars. Later, three Senate Democrats from states with auto manufacturing industries also wrote letters urging this matter. One of the senior Democratic senators, Sherrod Brown, later raised the tone and demanded that President Biden completely block Chinese electric vehicles from entering the US 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.