End of tariffs on Mexican cement sought

Duty leading to shortages, U.S. housing industry says

August 15, 2004|By Mark Drajem | Mark Drajem,BLOOMBERG NEWS

The U.S. housing industry appealed to the Bush administration last week to drop tariffs on Mexican cement, saying those duties of 81 percent are causing a shortage of the building material that could undermine the U.S. housing market.

Forty-one percent of builders reported a shortage of cement compared with 11 percent in May, according to a survey by the National Association of Home Builders.

The short supply of cement, steel framing, insulation and other materials is adding as much as $7,000 to the cost of a new home and leading to construction delays, the group said in a statement.

"Left unchecked, these factors could result in serious disruptions to the housing market," said Jerry Howard, the chief executive of the builders group, which represents 215,000 companies involved in construction, remodeling and financing.

To reduce the shortage of cement, the housing industry is calling on the administration to drop a 14-year-old duty on cement from Mexico.

The duties most affect Cemex SA, the world's third-largest cement maker, which has had its exports to the United States reduced by the 80.75 percent duty.

The Commerce Department said it has no ability to end the duties now and could only do so at the request of the U.S. companies that originally petitioned for the tariffs.

"It isn't a call for us to make at this point," said Mary Brown Brewer, a spokeswoman for the department.

And Joseph Dorn, a lawyer for U.S. companies that originally appealed for the duties, said that Mexico is not the cause of the cement shortage.

Dorn and Howard said the cause of the cement crunch is strong demand from China and a limited number of cargo ships that can bring the product to U.S. ports.

Still, Mexico is the "most logical source of supplementary imports," Howard said. "With global shipping capacity strained, the ability to import cement from Asia and Europe to meet this shortfall has been significantly reduced."

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