The 2020 Mid-Year Economic Update_long

U.S. to Phase Out Tariffs on Mexican Cement

In a move likely to be felt across many wholesale distribution sectors, the U.S. and Mexico have agreed to resolve a 16-year dispute on anti-dumping duties on Mexican cement imports. The National Association of Home Builders said the agreement will lead to free trade and will alleviate shortages reported in more than 30 states. Prices for cement have jumped at least 20 percent in the past year. MDM has heard reports of infrastructure and construction projects delayed due to concrete shortages. That in turn has delayed sales of other products.

“With U.S. capacity running at full tilt, the nation still must import more than 20 percent of its cement supply in order to meet domestic needs,” said David Pressly, NAHB president. “The pact is vital to meet consumer demand, which is expected to increase in the coming year as the building efforts from Hurricanes Katrina and Wilma get into full swing.”

Under the proposed settlement, scheduled to go into effect this spring, the U.S. will reduce duties on Mexican cement to $3 per ton from $26 a ton, and Mexican imports would be permitted to grow to 3 million metric tons annually, up from last year’s level of about 2 million tons. After three years, the quotas and duties would be entirely eliminated.

High anti-dumping tariffs in place since 1990 have limited supply from Mexico, which has excess capacity, according to the NAHB.

The accord is structured so that Florida and the Gulf region, facing shortages of cement, will be able to increase their shipments of Mexican cement, according to the NAHB. The negotiated framework also provides the flexibility to allow the president to direct an additional 200,000 metric tons of cement to areas hit by natural disasters.

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