Understanding the Economic Effects of U.S. Tariffs on Mexican Steel and Aluminum
Under the administration of Donald Trump, the U.S. government announced the imposition of a 25% tariff on imported steel and 10% on imported aluminum, arguing economic and national security reasons under Section 232 of the Trade Expansion Act.
This measure has generated concern in Mexican industry, as it could significantly affect exports and the country’s economy. Mexican authorities are evaluating possible responses and strategies to mitigate the impact of these tariffs on the industrial and commercial sectors.
Impact on Mexico and the T-MEC
- Possible early renegotiation of the Mexico-US-Canada Agreement (T-MEC).
- Impact on key sectors such as the automotive, electronics, electrical and chemical-pharmaceutical industries.
- Reduction of Mexican exports to the U.S., since the U.S. is the largest destination for Mexican steel products.
Measures taken by the U.S.
- Elimination of previous agreements with Mexico, Canada, the EU, Japan, South Korea and others.
- Reinforced vigilance to prevent tariff evasion.
- Requirement of detailed certification of the origin of steel and aluminum.
- Non-renewal of tariff exemptions, which will expire on March 12, 2025.
Main Suppliers of Steel and Aluminum to the U.S.
1. Canada ($12.984 billion dollars)
2. China ($12.476 billion dollars)
3. Mexico ($10.450 million dollars)
4. South Korea ($5.056 billion dollars)
5. Brazil ($4.982 billion dollars)
(Source: American Iron and Steel Institute, CNN)
Mexican Government’s Response
The Secretary of Economy, Marcelo Ebrard, announced that consultations will be initiated with the U.S. to reconsider the measure and seek trade alternatives.
In conclusion, these tariffs could significantly affect Mexican industry, causing a drop in competitiveness and possible trade retaliation, as discussions continue, Mexico may seek exemptions or alternative markets to mitigate these effects.