“Chinese steel and aluminum entering the U.S. market through Mexico evades tariffs, undermines our investments, and harms American workers in states like Pennsylvania and Ohio,” she said. “When China’s export surges harm our markets, whether directly or via other countries, we will act.”
Steel exported from China is unnaturally cheap because of large state subsidies that drive out competitors. Fewer U.S. steel and aluminum factories make the United States vulnerable in emergencies, such as war, and subject to higher prices if the Chinese Communist Party (CCP) suddenly decides to decrease supply to the United States or tries to impose monopolistic pricing.
Increased tariffs may increase prices for domestic producers and consumers, although they will also increase U.S. government revenue, which can decrease U.S. income taxes or pay down the national debt. They will help the U.S. steel and aluminum industries keep their factories running, increase jobs, and build the U.S. industrial ecosystem. That would be critical in case of some emergencies in which the United States relies more heavily on what we can produce at home, not what could be sunk in transit from China or otherwise denied to U.S. markets.
If the United States and China go to war over Taiwan, for example, will the CCP allow Chinese steel to be shipped to the United States? Don’t bet your life on it.
The CPA argues that Mexico is in “ongoing and blatant violation of the 2019 joint steel agreement” in which “the U.S. agreed to drop Section 232 tariffs, and Mexico agreed to restrain steel export volume to 2015–17 levels.”
That said, the tariffs are a step in the right direction. They apply only to Mexican metals that are partly made in China. Still, at least this establishes the principle, for perhaps the first time, that tariffs against an adversary should apply to products that it attempts to transship through third countries. Now that such a tariff has been imposed at least once, it will be easier for the United States to include clauses in future tariffs to apply to any company from any adversary country, regardless of its location.
Given that the CCP is anti-United States and can order any of China’s companies anywhere in the world to halt exports to countries that it dislikes, it is unwise to rely on these companies in case of emergency. Tariffs on them will encourage safer imports from friendly countries, protect and grow U.S. supply chains, and produce more good jobs.