Mexico and the US are close to agreeing to lower or eliminate Trump's 50% steel tariffs

The United States and Mexico are close to reaching a deal to remove or reduce 50% tariffs on steel imports, industry officials and sources familiar with the situation said.

This source said one possible scenario would be a quota system that permits a specific volume of Mexican imports into the country. This volume would be subjected to no duty or a low rate, with imports above that level paying the full 50% tariff.

However, whether the agreement would fully exempt in-quota steel imports from any duties or lower the applicable rate remains unclear. The specific volume cap for the proposed quota has also yet to be finalized.

US-Mexico deal permits limited tariff-free Mexican steel imports

The negotiation over reducing tariffs for Mexican steel is underway, citing people familiar with the matter. The country’s economic minister highlighted that Mexico would request that Donald Trump’s administration exempt them from the planned increase in steel tariffs to 50%.

During an event in Mexico City, Secretary of Economy of Mexico Marcelo Ebrard described Trump’s tariff as unfair and unsustainable. Hence, according to Ebrard, they would share their reasons with Trump’s administration to keep Mexico out of that rule.

Ebrard, who headed to Washington on Friday, June 6, to meet with US officials, also mentioned that Mexico had a “Plan B” if the increased tax stayed in effect. 

The deal has not been concluded, but it would allow American companies to import Mexican steel free of tariffs under a certain condition. This condition is that the overall shipment must be below a certain level relative to the net imports of the two countries historically.

It is worth noting that in 2024, Mexico ranked as the third largest source of steel imports for the US, providing 3.52 million net tons. This number represents a 16% decrease from the 4.18 million tons imported in 2023, based on data from the US Census Bureau gathered by the American Iron and Steel Institute. 

Canada led the list of foreign steel sources with 6.56 million net tons in 2024, followed by Brazil with 4.5 million tons.

Neither a White House spokesman nor a Commerce Department spokesman, which oversees Trump’s “Section 232” national security tariffs on steel and aluminum, replied to a request for comment.

Marcelo Ebrard described Trump’s tariff policy as “unfair” to Mexico 

When Trump implemented a 25% tariff on steel in 2018, Mexico and Canada were given exemptions and special rules so they would not see a surge in imports beyond historical levels. However, these actions did not set up an official quota system like the one created for Brazil. 

In April, Trump removed all quotas, exemptions, and exclusions for steel and aluminum to reinforce metal tariffs and raised the overall rates.

At this point, Marcelo Ebrard explained his earlier claim that Trump’s tariff was unfair. Ebrard stated that his government has pointed out that the United States has a trade surplus with Mexico in steel and aluminum.

A second trade source informed reporters that industry leaders urged US officials to establish a clear steel quota system for Mexico due to previous import spikes.

Notably, US officials have consistently aimed to stop steel products from third countries like China from entering the United States through Mexico. 

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