The Trump administration on Wednesday will begin imposing 25% tariffs on all steel and aluminum imports, part of a move to halt China’s sneaky practice of exporting products into the United States via Mexico, Canada and other nations.
President Trump wants Mexico, Canada and other trade partners to do more to deter China’s deceptive practice of shipping goods to foreign countries, which they then repackage for export into the U.S.
The practice, known as transshipment, allows China to duck U.S. tariffs on Chinese-made products, including steel and aluminum, that flood the U.S. and cause American manufacturing plants to shutter.
The duties on steel and aluminum will be implemented amid growing opposition to the president’s tariff strategy. On Monday, a Wall Street sell-off entered a second week, and Democrats accused the president of damaging the economy.
Manufacturers say the free trade agreements under which the U.S. has operated for the past three decades allowed China and other countries to rip off the United States, shutter factories and kill American jobs.
“The only thing free has been the access to the U.S. market, and that access to other countries is denied to U.S. manufacturers, whether through high tariffs, duties, [value added taxes] at the border, government subsidies or devalued currency. Is it any wonder we don’t make anything in this country anymore?” said Anderson D. Warlick, CEO of North Carolina-based Parkdale Mills, the largest yarn spinner in the U.S.
Mr. Warlick told lawmakers on Capitol Hill last week that China’s underhanded tactics have surged textile imports into the U.S., skirting tariffs through customs fraud, transshipments and other shady tactics.
He said China’s exploitation of trade laws has shuttered 27 U.S. textile factories since 2023.
“We hear tariffs will cause a trade war. Well, we lost that war 30 years ago,” Mr. Warlick said.
Stopping China’s transshipments is a central reason behind Mr. Trump’s tariff policy, said E.J. Antoni, an economist with the conservative Heritage Foundation.
China has increasingly shipped steel and other products to Canada and Mexico, for example, to duck tariffs under the U.S.-Mexico-Canada free trade agreement signed by Mr. Trump in 2020.
The president is using tariffs against Canada and Mexico, Mr. Antoni said, “to try to get them to stop allowing a nation like China to abuse the trade agreement.”
Since 2018, the U.S. has imposed a 25% tariff on steel and a 10% tariff on aluminum imported from China. Starting Wednesday, the aluminum tariffs will jump to 25% and will be imposed on most steel and aluminum products, including those previously excluded from the tariffs.
Mexico is among the nations viewed as major offenders when exporting Chinese steel to the United States. Mexico’s steel imports from China have surged since the U.S. imposed 25% tariffs on Chinese steel. At the same time, U.S. imports of steel from Mexico also have risen significantly.
Trump administration officials said Canada is also sending China’s heavily subsidized steel to the U.S. Mr. Trump cited rising steel imports from Canada and Mexico in announcing the new tariffs. He said some of the steel originates from China, which, according to an executive order, “is seeking to evade quantitative restrictions” on exports to the United States.
Manufacturers gathered in the Capitol last week to urge lawmakers to go after China and other nations for exploiting trade loopholes through transshipments and other deceptive practices.
Tom Muth, who oversees Zekelman Industries’ tubular products division, said Thailand, Oman and Vietnam are flooding the U.S. market with steel from China.
The Illinois-based company operates 21 factories in the U.S. and is struggling to compete against Chinese steel products dumped in the U.S. through other countries. More than half of the U.S. steel pipe and tube market is supplied by imports that come indirectly from China, Mr. Muth said.
“For over two decades, Zekelman has been battling against these unfairly traded imports from China. These imports have cost us significantly, and we’ve been forced to close factories, reduce employment and reduce investment,” Mr. Muth said.
Industry leaders said the combination of Mr. Trump’s tariffs and legislation to improve enforcement could salvage U.S. manufacturing, which is hindered by dumped Chinese products that skirt trade laws.
Seeking to ramp up enforcement, the House Select Committee on the Chinese Communist Party sent a bipartisan letter last week to Attorney General Pam Bondi, Homeland Security Secretary Kristi Noem and U.S. Trade Representative Jamieson Greer. The letter urged them to investigate and halt illegal Chinese trade practices, “including by criminally prosecuting trade criminals, stepping up civil enforcement” and investigating transshipment schemes.
Rep. Ashley Hinson, Iowa Republican, introduced a bipartisan bill to establish a task force within the Justice Department dedicated to prosecuting trade crimes committed by China and other countries. The bill passed the House by voice vote in the last Congress but never made it to the floor in the Senate. Lawmakers hope to get the bill to Mr. Trump’s desk this year.
“I do think tariffs are a powerful tool in the arsenal to have, but I also believe that they should be backed by strong enforcement of our trade laws, and that will stop China from ripping us off,” Ms. Hinson said.
