Background on Donald Trump and Relevance
Donald J. Trump served as the 45th President of the United States from January 20, 2017, to January 20, 2021. During his presidency, he implemented several trade policies, including tariffs on steel and aluminum imports. These actions have had significant implications for global trade, particularly affecting countries like Mexico.
Tariff Increases on Steel and Aluminum Derivatives
According to the final interim rule from the U.S. Department of Commerce, President Trump plans to implement two rounds of tariff increases on additional steel and aluminum derivatives.
Current Impact on Mexican Exports
As of now, the U.S. tariffs on steel, aluminum, and their derivatives potentially affect Mexican exports worth $78,837 million (based on 2024 figures), which account for 12.8% of Mexico’s total product exports.
- First-round tariffs (Trump’s second term) impact Mexican exports valued at $3,896.8 million for steel and aluminum derivatives and $30,933.2 million for products derived from both metals.
Upcoming Tariff Increases
A second round of requests to include more derivatives of both metals is scheduled for September, with another round planned for January 2026.
Starting August 18, 2025, the U.S. will impose a 50% tariff on steel and aluminum content in 407 derivative goods, affecting $44,007 million worth of Mexican exports.
Tariff Application Details
U.S. Customs and Border Protection applies a 50% tariff on steel content from Mexico and Canada under the USMCA, except for cast and rolled products manufactured in the U.S. For non-North American countries, the tariff is 50% on steel content with an additional 10% on non-steel products and a possible 20% + Section 301 tariffs for China.
Regarding aluminum, Mexican and Canadian exports under the USMCA face a 50% tariff on aluminum content, except when the material is melted in the U.S.
The rest of the world pays 50% and an additional 10% on non-aluminum products, with up to 20% + Section 301 tariffs for China.
Rationale Behind Tariff Increases
When Trump began unilaterally increasing tariffs in this sector during his second term, he argued that imports of steel items from certain countries either tariff-free or subject to alternative agreements had significantly increased.
- He pointed out that excess capacity in the global steel industry had been rising again in recent years.
- For example, Canadian imports increased by 18% after Canada was excluded from Section 232 tariffs.
According to the Organisation for Economic Co-operation and Development (OECD), global steel capacity excess is projected to reach approximately 630 million metric tons by 2026, surpassing the total steel production of all OECD countries.
Simultaneously, the OECD noted that Chinese steel exports had increased to over 114 million metric tons by November 2024, displacing production in other countries and forcing them to export larger volumes of steel and steel derivatives to the U.S.
