• Skip to main content

    Analysis

    AISI: Use USMCA review to strengthen markets for American steel

    Written by Kevin Dempsey


    Editor’s note

    This is an opinion column. The views do not necessarily reflect those of SMU. We welcome you to share your thoughts as well at smu@crugroup.com.

    The recent announcement that the United States will seek changes to the US-Mexico-Canada Agreement (USMCA) before agreeing to extend it should surprise no one. In fact, this is exactly what the agreement envisioned.

    When USMCA replaced NAFTA, the three governments agreed that after six years they would conduct a comprehensive review of how the agreement was working and determine whether improvements were needed before extending it for 16 years. The review mechanism was deliberately built into the USMCA to allow the three governments to modernize and strengthen the agreement over time.

    Over the past year, the Trump administration sought input from industry, labor, and other stakeholders on where the agreement has succeeded and where it can be strengthened. The current negotiations are the natural next step in that process and reflect recognition that the economic landscape has changed since 2020. The agreement must evolve to meet today’s challenges—particularly the global steel overcapacity crisis fueled by China and other economies.

    Now, the United States, Canada, and Mexico have a tremendous opportunity to transform USMCA into something even stronger: the foundation of a true “Fortress North America” for steel and manufacturing.

    The original USMCA represented a significant improvement over NAFTA. Canada and Mexico remain by far the largest export markets for American-made steel, accounting for approximately 93% of all American steel exports in 2025. A significant portion of those steel exports serves the North American auto industry, which has integrated production across all three countries. The agreement’s strengthened automotive rules of origin—requiring 75% North American content and mandating that 70% of steel purchased by automakers originate within North America—have bolstered this key market for American steel by reinforcing regional manufacturing supply chains and encouraging greater sourcing from domestic steel producers. Those achievements should not be understated.

    However, the agreement is being undermined by the surge of steel imports entering Canada and Mexico from outside North America—the result of years of unfair government subsidies, state-directed investment, and market-distorting policies in numerous countries that created enormous global steel overcapacity.

    While the United States has substantially reduced steel imports from outside North America through aggressive enforcement of Section 232 tariffs and antidumping and countervailing duties, imports into Canada and Mexico from countries outside the region increased. This has weakened the North American manufacturing base that USMCA was designed to strengthen.

    The aforementioned Section 232 national security tariffs and other trade enforcement measures have reduced imports, increased domestic steel production, improved capacity utilization and encouraged billions of dollars in new investment across the American steel industry. Canada and Mexico have taken some positive steps of their own, but considerably more remains to be done if they are to match the US Section 232 tariffs in both size and scope, and to ensure that these tariffs are not circumvented or evaded.

    Such an approach must include toughening the USMCA’s rules of origin to ensure that steel should qualify as North American only if it is actually melted and poured in North America. Stronger rules of origin should also be required for downstream manufactured goods to qualify as made in the region.

    By building a genuine Fortress North America—with aligned external tariffs, stronger rules of origin and robust enforcement against circumvention and evasion—the USMCA can become the foundation for a manufacturing renaissance that benefits workers and communities across the United States, Canada, and Mexico. That is the USMCA we need, and it is within reach.

    The current USMCA review is not a threat to the agreement—it is the best opportunity available today to get it right, and the United States, Canada, and Mexico should seize it to align our defenses, close the loopholes, and build a regional trade agreement strong enough to outlast the next sixteen years of global competition.

    Kevin Dempsey

    Read more from Kevin Dempsey

    Latest in Analysis

    Commerce lowers Mexico’s dumping rate in CORE case

    The US Department of Commerce has reduced the anti-dumping duty on corrosion-resistant steel (CORE) for some Mexican producers after a court order. On remand from the Court of International Trade (CIT), Commerce agreed that the record did not show that Galvasid SA de CV’s US customers separately negotiated or paid freight or insurance. The agency therefore removed the adjustment and recalculated the margin. As a result, the agency lowered Galvasid’s coated steel dumping rate to 14.54%, from 24.05%. The all-others rate is now 14.29%, down from 17.42%. Ternium’s rate is unchanged at 14.17%.

    Sheet and plate price gains accelerate as 2026 tons dry up

    Sheet and plate prices continue to push higher as mills charge a premium for what little spot tonnage remains for 2026, market participants said. SMU’s price assessment for hot-rolled (HR) coil now stands at $1,290 per short ton (st) on average, up $10/st week over week. HR price gains averaged $5/st w/w throughout July and August, with no changes in prices some weeks and gains of at most $15/st w/w. In September and October to date, in contrast, prices have increased every week—with the average gain at $11.25/st w/w and w/w gains as high as $20/st. Prices for cold-rolled and coated products continued to increase as well. SMU's price assessment for cold-rolled (CR) coil clocked in at...

    Cliffs shifts customers to index-linked, take-or-pay contracts

    Cleveland-Cliffs Inc. expects to earn more from the repricing of contract tonnage than it previously projected. The Cleveland-based steelmaker raised its estimate for the earnings benefit of the repricing to about $850 million from about $500 million. The company also said negotiations for 2027 contracts are progressing better than expected. More than half of the 2027 renewal process was complete as of Cliffs' third-quarter earnings call on Monday morning.

    Cleveland-Cliffs postpones Burns Harbor furnace reline to 2028

    Cleveland-Cliffs Inc. has rescheduled the planned reline of the C blast furnace at its Burns Harbor steel mill in northwest Indiana from mid-2027 to April 2028, company executives said. The delay allows the Cleveland-based steelmaker to keep the furnace, which has annual capacity of ~2.2 million short tons, operating while steel prices and demand remain favorable for mills, they said during the company’s third-quarter earnings call on Monday.

    Brazilian pig iron trade with US stuck in doldrums

    The pig iron trade from Brazil into the US has been lackluster over the last month with minimal activity. Many players in the trade thought activity would increase after the International Iron Metallics Assn (IIMA) meeting in Chicago earlier this month, but it has not materialized so far. Part of the reason could be the US scrap buy for October stretched out longer than usual, as buyers and sellers haggled over price. Now that prices settled upward, there may be different ideas on where pig iron prices should settle.