Background on the Tariffs and Their Impact
Since August 18, 2023, the United States has implemented a 50% tariff on more than 400 steel and aluminum derivative products under Section 232 of the Trade Expansion Act of 1962. This move affects US imports valued at $209,397 million from around the world. Mexico represents 21% of these imports, totaling $44,007 million annually. This amount accounts for 9% of the total US imports from Mexico.
Tariff Details and Exemptions
The US Department of Commerce has established that non-steel/non-aluminum content in the listed goods is subject to reciprocal tariffs. Furthermore, Section 232 tariffs do not accumulate with reciprocal tariffs or other Section 232 tariffs (except between steel and aluminum). Exemptions include derivative products of steel with steel content processed in another country from scrap steel originating in the US, and aluminum derivative products with aluminum used in manufacturing originating from molten and cast in the US.
Mexico’s Market Share
In 2024, the US imported:
- $30,033 million of steel derivative products from Mexico (20% of total external purchases)
- $10,445 million of aluminum derivative products from Mexico (37% of total external purchases)
- $3,529 million of steel and aluminum derivative products combined from Mexico (11% of total external purchases)
Mexico holds the leading market share for both steel and aluminum derivative imports in the US. In 2024, Mexico accounted for 19% of US imports of steel derivatives ($181,258 million), surpassing China (15%) and Canada (11%). For aluminum derivatives, Mexico contributed 23% of US imports ($59,648 million), outpacing China (16%) and Canada (8%).
Negotiations with the US Government
The Mexican government is engaged in negotiations with the US to reach an agreement on the tariffs imposed by President Donald Trump during his second term. These tariffs cover autos, certain auto parts, steel, aluminum, copper, and products that do not comply with T-MEC (Mexico-United States-Canada Agreement) origin rules.
The US has argued that tariffs are necessary for national security reasons, while international trade experts contend that this violates T-MEC and World Trade Organization (WTO) regulations.
Key Questions and Answers
- What are the tariffs about? The US imposed a 50% tariff on over 400 steel and aluminum derivative products under Section 232 of the Trade Expansion Act of 1962.
- Which countries are most affected? Mexico is the most impacted country, with over $44 billion in annual exports affected. China and Canada also experience significant impacts.
- What are the exemptions to the tariffs? Exemptions include derivative products of steel and aluminum with content processed in another country from scrap originating in the US.
- What is Mexico’s market share for these imports? Mexico holds a leading market share for both steel and aluminum derivative imports in the US, accounting for 19% of steel derivatives and 23% of aluminum derivatives in 2024.
- What are the ongoing negotiations between Mexico and the US? The Mexican government is negotiating with the US to reach an agreement on tariffs imposed by President Trump, which cover autos, certain auto parts, steel, aluminum, copper, and products not complying with T-MEC origin rules.
- Why are there controversies surrounding these tariffs? The US argues that tariffs are necessary for national security, but international trade experts claim this violates T-MEC and WTO regulations.
