POLITICAL OR COMMERCIAL BATTLE? MEXICO AND THE U.S. GENERATE TENSION IN THE STEEL INDUSTRY

What Mexico has been accused of?

A group of 14 U.S. senators warns the government of the danger posed by Mexican steel imports to their country.

The United States mentions that they are concerned about the increase of Mexican steel imports in the last 3 years (2020-2023) and the repercussions it has had in their country, such as the loss of thousands of jobs, the closure of companies and the loss of competitiveness due to low prices.

At the same time, they assume and distrust that Mexico is triangulating steel from Asian countries, which leads them to want to impose tariffs on Mexican steel and aluminum. The neighboring country is threatening to impose tariffs of 25% on Mexican steel and 10% on Mexican aluminum if Mexico does not act to comply with the spirit of the T-MEC.

It is important to remember that, in 2019, the United States and Mexico agreed under Section 232 to omit any tariffs imposed in both countries on steel and aluminum products, in addition to omitting any transshipment of such metals that takes place outside the territory.

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What happened?

Raquel Buenrostro, Mexico's Secretary of Economy, together with the National Chamber of the Iron and Steel Industry (CANACERO for its acronym in Spanish) assure that "Mexican steel is exported to the United States with legality, transparency, competitiveness and respect for international trade rules, particularly those established in the T-MEC" (CANCERO in El Financiero, 2024, para.14).

In fact, while Mexico sold 2.3 million tons of steel to the United States, the United States sold Mexico 4.1 million tons.

In percentage terms, Mexico's share of the U.S. steel market is 2.5%, while the United States has a 13.9% share of the Mexican market.

If the U.S. imposes tariffs on both metals, we must act in the same way, and in this scenario, the U.S. loses out because it sells us more steel than we sell it.

Sources assure that we will be experiencing more pressure on trade issues such as transgenic corn, energy, and Asian investments, as the November presidential elections in the United States draw nearer.

There are 53 congressmen representing the steel industry in the United States, so they are looking for any alarming figure or indicator to demonstrate to the political parties that they have an interest in the industry and are contributing something, so that their work will not be at risk in the face of a change of government.

Mexico has the support of international and governmental organizations to demonstrate figures of Asian imports of these metals to the territory, and the origin and manufacture of steel and aluminum sold to the United States.

Our country does not have any major concern that the free trade agreement (T-MEC) or Section 232 established in 2019 will be broken, since as a country we are aligning the tariff rates to the North American par to 205 fractions of steel products from those countries with which we do not have a treaty, to avoid unfair trade practices or that the national industry is affected.

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