Mexico Intensifies Response to US Steel Tariffs Amidst Evolving Trade Landscape

US Steel Tariffs and Mexico's Stance

The United States has maintained tariffs on steel imports under Section 232 of the Trade Expansion Act of 1962, citing national security concerns. These tariffs, initially set at 25% and later increased to 50% in February 2025 by former President Donald Trump, have significantly impacted North American trade relations. Mexico has consistently challenged the economic rationale behind these duties, pointing out that the United States maintains a steel trade surplus with Mexico, which Mexican officials argue undermines the national security justification.

In 2018, Mexico previously implemented retaliatory tariffs ranging from 7% to 25% on various US products, including steel, pork, apples, and bourbon, in response to the initial Section 232 measures. An agreement in May 2019 saw both countries remove these tariffs and retaliatory duties, establishing a monitoring mechanism to prevent import surges.

Mexico's Multi-Layered Policy Response

In recent developments, Mexico has adopted a multi-layered strategy to address the ongoing trade tensions. The Mexican Senate, in its Sectoral Diagnostic Summary of USMCA, has emphasized the need for retaliatory measures if the United States does not eliminate the Section 232 tariffs. This stance is being communicated to President Claudia Sheinbaum, with calls for equivalent reciprocal measures if tariff elimination is not achieved.

Furthermore, Mexico is implementing its own comprehensive Tariff Package, set to take effect on January 1, 2026. This package introduces duties of up to 50% on 1,463 products from countries with which Mexico does not have free trade agreements, primarily targeting imports from Asian nations. Mexican officials, including Economy Secretary Marcelo Ebrard, have stated that these new tariffs are designed to protect approximately 350,000 domestic jobs across sectors like steel, automotive, footwear, and textiles, and to ensure fair competition against what they describe as 'unfair competition' from cheaper Asian goods.

Impact on North American Trade and Future Outlook

The US has also intensified its focus on preventing the transshipment of steel from non-market economies through Mexico. In July 2024, new proclamations were issued, requiring steel imports from Mexico to be 'melted and poured' in North America to qualify for Section 232 tariff exemptions. This measure aims to close loopholes that allowed raw steel materials, particularly from China, to be processed in Mexico and enter the US duty-free.

Industry stakeholders and government bodies in Mexico, such as the steel industry association CANACERO, are actively engaged in shaping policy responses. While opposing US tariffs, CANACERO supports Mexico's new tariffs on non-FTA countries, viewing them as crucial for stabilizing the domestic steel sector amidst falling exports and increased pressure from unfair trade practices. The upcoming 2026 USMCA review is anticipated to be a critical juncture for discussions on these trade issues, with both countries seeking to reinforce supply chain resilience and support long-term competitiveness within the region.