US, Mexico discuss deal to cut Trump’s steel tariffs, sources say
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Mexico was the third largest source of US steel imports in 2024 at 3.52 million net tonnes.
PHOTO: REUTERS
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WASHINGTON - The United States and Mexico are negotiating a deal to reduce or eliminate President Donald Trump’s 50 per cent steel tariffs on imports up to a certain volume, industry and trade sources said on June 10.
An industry source familiar with the talks said that a likely outcome would include a quota arrangement, under which a specified volume from Mexico could enter duty free or at a reduced rate and any imports above that level would be charged the full 50 per cent tariff.
It was unclear whether the deal would eliminate tariffs altogether for in-quota steel import volumes from Mexico or reduce them to a lower level, the source said. The specific volume level of the quota also was not yet determined.
Bloomberg News first reported the negotiations over tariff reductions for Mexican steel, quoting people familiar with the matter as saying that the two sides were close to a deal.
The report said that terms of the agreement had not been finalised, but would allow US companies to import Mexican steel tariff-free as long as total shipments are kept below a level based on historical trade volumes.
A White House spokesperson declined comment, while a spokesperson for the Commerce Department, which administers Mr Trump’s “Section 232” national security tariffs on steel and aluminium did not respond to a request for comment.
Mexico was the third largest source of US steel imports
Canada was the largest foreign steel supplier at 6.56 million net tonnes in 2024, followed by Brazil at 4.5 million.
When Mr Trump first imposed 25 per cent steel tariffs in 2018, Mexico and Canada were granted exemptions with special procedures aimed at curbing any import surges beyond historical volumes. But these measures stopped short of a formal quota arrangement such as that for Brazil.
Mr Trump cancelled all steel and aluminium quotas
A second trade source told Reuters that industry officials were pressing for a clearly defined steel quota arrangement for Mexico, given past import surges from Mexico. US officials have long sought to curb the transshipment of steel products from third countries such as China via Mexico to the United States.
Mexican Economy Minister Marcelo Ebrard told reporters at a morning event that the government had argued to US officials that the tariffs were unjustified, noting the United States runs a trade surplus with Mexico in steel and aluminium.
“Putting a tariff on a product where you have a surplus is quite debatable because the objective of the tariff is to reduce the deficit,” he added.
Mr Ebrard said countries like the United Kingdom had been exempted from similar measures and urged the US to do the same with Mexico. He warned the tariffs would hurt jobs and supply chains in both countries due to their economic integration. REUTERS
