The US is calling on Mexico to impose tariffs on Chinese steel, following the US example

Mexico may link any potential decision to a review of the USMCA trade agreement

The US authorities have approached the Mexican government with a proposal to introduce import duties on steel and aluminium from countries outside North America (following the model of the US Section 232 regulations), in order to restrict imports from China. This was reported by Bloomberg.

The main aim of the initiative is to preserve preferential terms for producers in the US, Mexico and Canada by creating a single external barrier against Chinese products. According to the publication’s sources, the Mexican side has expressed its willingness to consider this proposal as part of the negotiations to revise the USMCA trade agreement.

Specific tariff rates and the list of goods are currently under discussion, but the US side hopes to agree a framework agreement with Mexico by the end of this year.

Consultations between the countries have intensified following the US’s decision on 1 July not to extend the USMCA in its current form. Washington is seeking to tighten regional rules of origin and minimise China’s economic influence in the region. Last week, the third round of bilateral talks took place in Mexico City, attended by US Trade Representative Jamison Greer and Mexican Economy Minister Marcelo Ebrard. In addition to the steel industry, the parties discussed the automotive sector, economic security, labour and agriculture. The next meeting is due to take place in September in Washington.

Currently, US customs regulations are stricter than those in Mexico: Washington imposes a 50% tariff on crude steel and aluminium from China and most other countries. In Mexico, however, rates are calculated separately for each category and, for countries with which there are no free trade agreements, amount to up to 25%. To make progress in the negotiations, Mexico has previously offered to significantly reduce its purchases of Chinese steel.

As reported by GMK Center, Mexico is seeking to have US tariffs on steel lifted as part of the review of the trilateral USMCA agreement. Trade tensions arose following the US imposition of tariffs on Mexican steel and aluminium under Section 232. Currently, a 50% tariff is imposed on both products. Meanwhile, the automotive sector pays a 25% tariff, albeit under the preferential arrangements provided for in the USMCA.