Analysis
June 2, 2026
Final Thoughts
Written by Ethan Bernard
The official beginning of the USMCA periodic review is less than a month away. But some negotiations have already started, and steel tariffs could hang in the balance.
We’ve spoken previously that negotiations seem to be a bit warmer between the US and Mexico vs. the US and Canada at the moment. In fact, we reported last week that the US and Mexico held bilateral talks in Mexico City. And now that the meeting has taken place, we can see that steel was on the docket.
A press release from the Office of the US Trade Representative from last Friday confirmed it.
“During this first round, negotiators discussed priority issues related to automotive rules of origin, steel and aluminum, and economic security,” USTR said.
When I reached out for comment on specifics as they relate to steel, they didn’t get back to me.
However, media reports show Mexican officials were more forthcoming about what happened during the meeting.
A report from Mexico Business News last Friday said Mexico’s Minister of Economy Marcelo Ebrard believes 50% Section 232 tariffs on steel and aluminum are “unsustainable.”
(SMU has previously reported that the US Commerce Department has opened a relief process that could see tariffs reduced on Mexican and Canadian steel and aluminum producers.)
Ebrard commented that the 50% tariff “has no justification,” according to the report.
The comments from Mexico’s minister highlight that reducing US tariffs on steel and aluminum is definitely crucial to the country’s negotiation strategy for the review. But one of the big questions is whether those tariffs could be lowered during the review process itself or separately in bilateral negotiations with the US.
And how will these separate negotiations affect USMCA in general?
Recall that Canada was left out of the US and Mexico talks. Well, today the Canadian government sent a letter to the US and Mexico, according to an article in US News and World Report. The letter recommended renewing the trilateral trade agreement for 16 years. And it seeks parallel negotiations on sectoral tariffs.
There will be a meeting between Canadian and US trade negotiators today, the article said.
We know Canadian steelmakers like Algoma have lamented the impact of US steel tariffs on their business.
It seems renewing USMCA (known as CUSMA in Canada) is just a part of what Canada is looking for. Reducing steel tariffs is a primary concern as well.
Since the Covid-19 pandemic, it has been a familiar refrain that the world of 2019 is never coming back. Since the second Trump administration, “Liberation Day,” and the assorted tariffs that came along with it, can the world of 2024 ever make a comeback?
That seems unlikely.
For example, we noted media reports in April stating that US Trade Representative (USTR) Jamieson Greer said Mexico should not expect the upcoming USMCA review to result in the removal of US steel and auto tariffs.
And way back at the Tampa Steel Conference in February, I moderated a panel on trade with Lewis Leibowitz, principal at the Law Office of Lewis Leibowitz, and Alan Price, partner and international trade group partner chair at Wiley Rein LLP.
I reported on one of the things the two agreed on in my Final Thoughts during the conference: “The old way of mediating trade policy is probably gone forever. We’re all anxious to find out what comes next.”
With both Canada and Mexico hoping to reduce US steel tariffs, we might not know exactly what comes next yet, but S232 is certainly a pressure point. While going down to zero seems fanciful at this juncture, could some kind of negotiated compromise be in the offing? Whatever happens, it’s going to be an interesting summer!
Make your end of summer plans now
Speaking of the summer… we all want to enjoy it fully! But don’t forget to make your plans for THE end-of-summer steel event: SMU Steel Summit, Aug. 24-26 in Atlanta. Hotels are filling up quickly. For the agenda, speakers, and event details, visit the SMU Steel Summit website. And you can register here.
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