Mexico to consult with US on steel and aluminum tariffs

After Donald Trump on Monday ordered a 25% tariff on aluminum and steel imports, including those from USMCA partners Mexico and Canada, the government of Claudia Sheinbaum will consult with the US administration on the issue.

Like he did in 2018, Trump authorized the tariffs under Section 232 of the Trade Expansion Act, which gives him the authority to impose trade restrictions for internal security reasons.

The tariffs will take effect on March 12 and will also include finished metal products, which could generate inflationary pressures, said Gabriela Siller, the director of economic analysis at Grupo Financiero Base, in a report for clients.

In response to Trump's announcement, the European Union announced retaliatory measures, which could lead to a trade war.

Mexico, for its part, has also expressed its willingness to take reciprocal measures, but for the moment, economy minister Marcelo Ebrard declared that "this tariff is not justified" because Mexico imports more steel from the United States than it exports. During Sheinbaum’s daily press conference, he showed a video explaining that it is "a bad idea" to impose this type of tariff in North America.

Ebrard announced that, on the instructions of the Mexican president, consultations would be held with the new US administration to present the Mexican government's information on the subject.

"This is what President Trump sometimes says: ‘common sense’. Well, we take him at his word, common sense, not shooting himself in the foot, not destroying what we have built over the last 40 years," said the minister.

When asked if the Trump administration's unilateral decision violated the trade agreement, Sheinbaum responded that it did and that there are panels within the USMCA trade agreement to resolve disputes. However, she clarified that “we have to wait” because the tariffs would not be effective until next month.

Gerardo Esquivel, former deputy governor of Mexico’s central bank, said on his X account that “tariffs on steel and aluminum will result in a hard blow to manufacturing employment in the United States by increasing their costs.”

Recent studies have shown that the 2018 tariffs translated into a net cost of 74,000 jobs – a thousand were created but 75,000 were lost, he added.

BNamericas asked Mexico’s iron and steel chamber Canacero on Monday about the new tariffs. A spokesperson for the chamber responded that they were waiting for the official announcement from the White House to understand the measure's scope and effects.

“As we have pointed out on previous occasions, the United States registers a surplus in bilateral steel trade with Mexico and benefits from its exports to our country,” the chamber said, adding that “in the Mexican steel industry, we believe that integration within the framework of the USMCA is the best way to address unfair trade in steel products, especially from China.”