CHICAGO — Zekelman Industries announced that it will be closing its factory in Long Beach, California. This facility primarily manufactures a complete line of steel conduit under the Western Tube and Wheatland Tube brand names. Moving forward, customers will be served by the company’s facility in Rochelle, Illinois, and additional distribution centers strategically located on the west coast.
A contributing factor in the closure of the Long Beach factory is the surge of imported steel conduit from Mexico. According to the U.S. Census Bureau, the expected volume of imported steel conduit from Mexico will increase to an estimated 69,641 tons in 2022 from 11,960 in 2017, an increase of 480%. When former President Trump exercised his authority on March 8, 2018, under Section 232 of the Trade Expansion Act of 1962 to impose a 25% tariff on steel imports to protect U.S. national security, he granted an exemption to Canada and Mexico as part of replacing NAFTA with the new USMCA trade agreement. It was clearly understood that if volumes imported into the U.S. from Mexico significantly exceeded (surged) historical norms, the U.S. would have the right to reimpose the 25% tariff or institute some other measures to reduce the surge.
As the surge continued in 2019 and into 2020, the Office of the United States Trade Representative worked with its Mexican counterparts to put a temporary permit control system (August 2020 to May 2021) in place to reduce volumes down to the spirit of the USMCA trade agreement. The desired outcome was self-regulation after May 2021. This obviously did not happen, as Mexican conduit imports continue to climb unabated and are up six-fold from pre-USMCA levels. Additionally, starting one month after the permit control period was put in place and continuing to the current day, the Mexican steel conduit producers and their importers have misclassified their imported steel conduit into Chapter 85 rather than Chapter 73 to circumvent the control system. Based on reporting by the U.S. Census Bureau, 77% of imported Mexican steel conduit was misclassified during 2021.
“All we ask for is for our trade agreements to be enforced,” explains Barry Zekelman, chairman and CEO of Zekelman Industries. “Instead, there will now be 145 hardworking UAW members that will be out of work at a company that pays life sustaining wages and benefits for American workers. How does this help promote the American dream?”Tagged with Biggest News, Zekelman