Trade Cases

Mexico Renews Non-Treaty Tariffs on Steel, Calls for End to Section 232

Written by Sandy Williams

Mexico’s Ministry of Economy announced last week that it will renew tariffs of 15 percent on imports of steel from countries that it does not have a free trade agreement with. The tariff does not impact steel imports from the U.S. or Canada.

The Ministry also stated that before signing a new North American trade agreement with the United States, the Section 232 measures would have to be removed.

“Mexico is a steel deficit country and, in particular, with the United States we have a deficit of more than two billion dollars. Steel trade between Mexico and the United States favors, no doubt, the American nation,” said Undersecretary of Industry and Commerce Ernesto Acevedo Fernández.

“We believe that before the ratification of the Treaty, Mexico must be excluded from the 232,” said Fernández.

“It is also well known that steel, the steel industry, is experiencing a moment when there is an excess of production capacity worldwide. This excess capacity is inexorably translated into a production that exceeds the global demand for steel.”

In addition to excess capacity, two other factors are challenging the steel environment, said Fernández.

“One, is that the administration of President Trump in the United States has considered that steel can have a negative impact and put at risk the national security of that country. And another additional element is that, derived from this and other factors between the United States and China, there is clearly a commercial war.”

Fernández was asked why Mexico does not increase its steel tariff to 25 percent to match the U.S. Section 232 measures. Care was taken, he said, to select retaliatory targets that did not have a significant inflationary effect or have repercussions on downstream users of steel and aluminum.

Section 232 tariffs pose “a major threat to the U.S.-Mexico relationship” said Fernández.

“We think that Mexico: 1) is deficient in steel and is deficient in aluminum with the United States; 2) We are business partners, and our economies are chained by different industrial processes.”

“In this context, the Mexican economy, in no sense, can constitute a threat to the national security of the United States.”

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