US Slaps 'Symbolic' Tariffs On China Steel, Aluminum

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Only 4.5% of China's aluminum exports got sold directly to the US in 2023, according to a report published by the Shanghai Metals Market, a market research company.

The report said any new US tariffs will have only a small and short-term impact on Chinese steel and aluminum exports as China can diversify its metal exports to some emerging countries.

“China has no major trade disputes with developing countries. Even if there are some small conflicts, they can be resolved quickly,” a Zhejiang-based writer using the pseudonym“Casual Finance” says in an article published on Thursday.“China and developing countries are highly mutually beneficial and complementary.”

He added that a more urgent matter for China now is the need to stabilize its economic ties with the European Union, which has recently imposed tariffs on Chinese electric vehicles.

Others said weak domestic demand, caused by China's property crisis, is now a more pressing issue for Chinese steel makers.

Pressure from US lawmakers

In March 2018, the Trump administration imposed 25% and 10% tariffs on imports of Chinese steel and aluminum products, respectively, in accordance with Section 232 of the Trade Expansion Act of 1962, which authorizes the US commerce secretary to conduct comprehensive investigations to determine the effects of imports of any article on the national security of the US.

In May 2019, the US said it reached an agreement with Canada and Mexico to remove the Section 232 tariffs for steel and aluminum imports from the two neighboring countries, in exchange for their removal of all retaliatory tariffs they had imposed on American goods.

Since then, many Chinese steel and aluminum suppliers have set up units in Mexico to benefit from the US-Canada-Mexico free-trade agreement.

According to the Department of Commerce, US imports of steel from Mexico were up 72% in 2022 from the average level in 2015-2017.

In March this year, US Senators Tom Cotton and Sherrod Brown introduced a bipartisan bill called Stop Mexico's Steel Surge Act and called for reinstating the 25% tariff on Mexican steel imports.

They said Mexico agreed in 2019 that it would ensure greater transparency regarding steel and aluminum imports from third countries, but the country failed to follow through.

On Wednesday, the US said it reached a deal with Mexico to protect its steel and aluminum sectors from foreign tariffs circumvention.