US builders urge Bush to drop Mexican cement tariffs

US builders urge Bush to drop Mexican cement tariffs
Published: 12 August 2004

The nation’s home builders are urging the Bush administration to lift heavy duties on Mexican cement in the face of a shortage of building materials.  A July survey by the National Association of Home Builders said 41 per cent of builders reported a cement shortage, up from 11 per cent of respondents surveyed in May. The shortage has pushed up prices of cement, the key ingredient for making concrete for foundations.

Rising prices of cement and building materials such as steel framing, wallboard and insulating materials have added $5,000 to $7,000 to the cost of an average home, and construction delays caused by the shortages could push the prices up further, the Washington-based industry group reported.  "Left unchecked, these factors could result in serious disruptions in the housing market," Jerry Howard, the association’s executive vice president and chief executive officer, said in a prepared statement.

Since August 1990, Mexican cement producers have paid high duties to ship their product to the United States. U.S. companies had complained that their counterparts south of the border were dumping, or selling cement for less than it cost them to make it.  Houston-based Southdown was one of the companies that complained. But since then, Southdown was acquired by Monterrey-based Cemex, which operates its U.S. headquarters out of Houston.

Mexican cement companies Cemex and Grupo Cementos de Chihuahua have appealed to the US Department of Commerce to lift the stiff duties. In June, the home builders association also asked the Commerce Department to eliminate the duties, at least temporarily, to alleviate the national cement shortage.

While the duty makes imported cement expensive, supplies are also limited because of high demand  rom China and a limited number of cargo ships to bring the product to US ports, according to the home builders.