USTR eyes potential triangular metal trading in Mexico

Katherine Tai, who leads the federal office of the U.S. Trade Representative (USTR), specifically discussed steel and aluminum imports into Mexico that could move without proper country of origin labels to the U.S., according to that agency.

After a late-September meeting between Tai and Mexico's Secretary of Economy Raquel Buenrostro, the topic was the first one mentioned in a news release issued by the USTR recapping the dialogue.

Monitoring and preventing “triangular” trading involving tariffed or sanctioned metal products being trans-shipped through Mexico has been an issue for several years.

A 2016 investigation by the Wall Street Journal portrayed Chinese aluminum producer China Zhongwang Holdings Ltd. using a location in Mexico to filter tariff-free metal from there to the U.S.

Several people tied to that company were convicted about five years later for another aluminum import method the U.S. Department of Justice considered to be scheming to avoid payment of $1.8 billion in import duties.

In 2023, tariffs remain on Chinese aluminum, but they have been joined by a whopping 200 percent duty placed on Russian-made aluminum after that nation invaded Ukraine early last year. The U.S. also has imposed a 70 percent duty on Russian pig iron and some other Russian iron and steel products.

Steel from China, meanwhile, remains subject to a 25 percent tariff when entering the U.S. directly, while aluminum has a 10 percent duty level.

During the meeting, the USTR says Tai and Buenrostro discussed the importance of addressing concerns regarding the recent surges in Mexican exports of certain steel and aluminum products to the United States and the lack of transparency regarding Mexico’s steel and aluminum imports from third countries.

“Ambassador Tai and Secretary Buenrostro agreed on the importance of enhancing steel and aluminum trade monitoring efforts and instructed their teams to work toward the reinstatement of Mexico’s export monitoring regime," the USTR says.

In August, steel shipments from Mexico to the U.S. rose by 25.5 percent compared with the previous month, according to U.S. Census Bureau data aggregated by the Washington-based American Iron and Steel Institute. In the first eight months of this year, however, steel shipments from Mexico to the U.S. are down by more than 23 percent.