Commerce Department lowers tax on Mexican cement

After an International Trade Administration review, the U.S. Department of Commerce reduced the duty on cement supplies imported from Mexico from 55 percent to 42 percent.

“The agreement is a positive step towards resolving a 16-year dispute between the U.S. and Mexico,” said U.S. Commerce Secretary Carlos Gutierrez. “The agreement will help ensure that Gulf Coast communities have the resources to rebuild and it will also help U.S. cement producers access the Mexican market.”

The Commerce Department issued the antidumping order in August 1990, following its findings that cement from Mexico was being dumped in Southern states and the U.S. International Trade Commission’s conclusion the dumped imports had materially affected U.S. cement producers and their workers. In each year since the antidumping order, the Commerce Department has conducted an administrative review through ITA to update the dumping margin calculation.

In its most recent review of the antidumping order of gray Portland cement from Mexico, ITA calculated a dumping margin of 42 percent on imports of cement from August 2003 through July 2004.

“What this means is that the Mexican producers charged prices to its customers in Mexico that were 42 percent higher than it charged to its customers in the United States,” said Joe Dorn, spokesman for the Southern Tier Cement Committee.

Stephen Sandherr, chief executive of the Associated General Contractors of America, welcomed the move.

“We thank U.S. Commerce Secretary Gutierrez for having responded to AGC’s concern and look forward to a final agreement,” he said. “It is essential to allow cement in from ‘next door’ on the same terms that we now import it from China, Thailand and other more distant locations.”

The agreement also provides a disaster provision of an additional 200,000 metric tons of cement if the president determines a natural disaster warrants an increase in the import of Mexican cement.

Imports from Mexico would be capped at 3 million metric tons per year. “The tonnage would be a modest improvement over the 2.1 or 2.2 metric tons that were imported from Mexico in 2005, and most important, all limits would be removed in three years if both sides abide by the agreement,” Sandherr said.

In a letter to Gutierrez, the Associated Builders and Contractors also applauded the decision, but urged the agency to further reduce, and ultimately eliminate, the duty.

“While these duty cuts will alleviate some financial burden, the scale of the Gulf Coast reconstruction emphasizes the need to take further action that will allow increased availability of cement without unreasonable cost to contractors in those areas,” the letter stated. “ABC calls for the elimination of antidumping duties on Mexican cement so that rebuilding efforts in the Gulf region can proceed in a timely and economical manner.”

The antidumping duty on Mexican cement has averaged more than 60 percent since its implementation in 1990. The new 42 percent rate translates to $26 per metric ton.