Mexico considers stiff tariffs for steel, autos, and other imports

Tariffs could range from 10% to 50%, depending on the product, according to various media reports. Steel would see a new levy of 35%. Auto imports could see the maximum 50%, with the tax rate on Chinese-origin autos more than doubling from the current 15-20% to 50%.

The proposed tariff measures are part of the country’s draft federal budget for 2026. It still needs final government approval.

This appears to be a protectionist turn by Mexico to appease the Trump administration in the US and potentially to strengthen “Fortress North America,” in preparation for the mandatory review of the USMCA slated to begin next summer.

Canada has also been taking a harder line on imported steel and aluminum, with its policies broadly mirroring those implemented in the US.

Ternium CEO Maximo Vedoya told the audience of SMU’s Steel Summit two weeks ago that Mexican tariffs were coming for steel. Highlighting that Mexican President Claudia Sheinbaum plans to bring manufacturing back to the North American region, not just Mexico, he advocated for coordination between Mexico, Canada, and the US to combat imports of cheap Asian steel together.

Restricting cheap Asian imports would greatly benefit steel producers in Mexico, particularly Ternium. The steelmaker has invested heavily in production and downstream operations in recent years. It started up a 4.4-million-short-ton-per-year hot rolling mill in 2021, and its massive Pesqueria industrial center continues to ramp up operations. The pickling and finishing lines are already operating, and the cold-rolling mill and galvanizing line are set for start-up in December. A new slab mill, including an electric-arc furnace and direct-reduced iron (DRI) facility, is under construction and expected to begin operations by the end of 2026.