Metal Industry News

Zekelman Alleges Trade Violations in Suit Against Mexico

By on
Zekelman Industries has filed a lawsuit in U.S. District Court for the District of Columbia against the Republic of Mexico for violating trade agreements and dumping steel on the U.S. market. The lawsuit alleges that Mexico’s conduct threatens the national security of the United States by damaging domestic steel producers.

Additionally, the suit alleged, the violations forced Zekelman to close its Long Beach, Calif., tube manufacturing factory in 2022 and is responsible for the impending closure of its Chicago location in 2025. The closure of these two locations have resulted in more than 400 American workers losing their jobs, the suit claimed.

Simultaneously, Zekelman also filed petitions against the Republic of Mexico with the U.S. Office of Homeland Security and the Commonwealth of Pennsylvania. At the national level, the company filed a Section 232 Petition with the U.S. Office of Homeland Security to compel Secretary Alejandro Mayorkas to use the Office of Trade Relations to enforce trade agreements between the U.S. and Mexico.

Additionally, a Petition for Determination of Discrimination was filed in the Commonwealth Court of Pennsylvania stating that Mexico is discriminating against steel conduit made in Pennsylvania and violating the Pennsylvania Trade Practices Act. The PTPA was implemented in 1968 to protect steel and aluminum products made in Pennsylvania, making it unlawful for any public agency to specify, purchase or permit to be furnished or used, in any public works, aluminum or steel products made in a foreign country which has been determined as discriminating by the Court.

Steel shipments from Mexico have increased dramatically since 2021, causing declining employment and stunted growth at U.S. steel makers. The U.S. had agreed to lift tariffs in 2019 in return for Mexico agreeing to abide by reasonable levels of imports of steel to the U.S.

“Mexico is violating trade agreements and the Biden Administration is failing to enforce these rules. The American steel industry is being damaged and American workers are paying a price,” said Barry Zekelman, executive chairman and CEO. “Mexico is dumping steel on the American market. They price goods far lower than what domestic manufacturers can because of low labor and production costs. Mexico is being allowed to avoid tariffs, which nearly all other steel importers with similar labor conditions face. This is taking place even though the U.S. Commerce Department’s International Trade Administration previously found the Mexican government was subsidizing its steel producers.”