Background and Relevance of the Steel Industry in the United States
The steel industry in the United States plays a crucial role in the nation’s economy and security. It supplies essential materials for infrastructure projects, such as roads, bridges, buildings, electrical grids, automobiles, trucks, and clean energy technologies. The American Iron and Steel Institute (AISI) represents the U.S. steel industry in policy matters, encompassing manufacturers of carbon and stainless steels through electric arc furnaces, tube and pipe producers, and processors and fabricators of steel.
Proposal for a Common External Tariff on Steel Imports
In response to global overcapacity in steel production and trade diversion, the AISI has proposed a common external tariff on steel imports for the United States, Mexico, and Canada (USMCA) zone. This proposal aims to address the excess global steel production capacity and combat trade diversion, evasion, and circumvention of tariffs.
Key Components of the AISI Proposal
- Common External Tariff: The AISI recommends that the U.S., Mexico, and Canada adopt a common external tariff on all steel imports from outside the USMCA region.
- New Rule of Origin for Cast Iron: The proposal includes a new rule of origin for cast iron that would classify all steel products as North American under the USMCA and Section 232 tariffs.
- Strengthened Rules of Origin: The AISI advocates for more robust rules of origin in the USMCA to encourage the use of North American steel in manufactured products, such as automobiles and trucks.
- Reform of Temporary Importation Programs: The proposal calls for reforms to temporary importation, duty drawback, and deferred duty programs within North America to prevent circumvention of tariffs.
- Improved Monitoring and Transparency: The AISI requests enhanced and transparent monitoring of steel imports by all North American countries, including data collection and publication based on the country of smelting and casting for all steel products.
- Increased Cooperation Among North American Customs Authorities: The proposal emphasizes the need for greater cooperation among North American customs authorities to address trade diversion, evasion, misclassification, and undervaluation in customs.
Current Trade Environment and Impact of Tariffs
Currently, U.S. customs impose a 50% tariff on steel, aluminum, and copper imports from around the world, with some exceptions under Section 232. These tariffs are a significant point of contention in Mexico’s negotiations with the U.S.
The AISI-proposed tariffs aim to address the decline in Mexican steel and aluminum exports to the U.S. market following President Donald Trump’s tariffs, which led to a 29% and 20% decrease in steel and aluminum exports, respectively, from January to July 2025. The tariffs were initially set at 25% in March and later increased to 50% in June.
Key Questions and Answers
- What is the American Iron and Steel Institute (AISI)? The AISI represents the U.S. steel industry in policy matters, encompassing manufacturers of carbon and stainless steels through electric arc furnaces, tube and pipe producers, and processors and fabricators of steel.
- What is the purpose of the proposed common external tariff? The AISI’s proposal aims to address global overcapacity in steel production and trade diversion by implementing a common external tariff on steel imports for the USMCA zone.
- Which companies are part of the AISI? Notable members include ArcelorMittal, Cleveland-Cliffs Inc., North American Stainless, Outokumpu, SSAB Americas, and Tenaris Bay City. Associated companies are AKJ Steel Industries, Befesa Zinc US Inc., and GrafTech International.
- How have tariffs impacted Mexican steel and aluminum exports? Following the implementation of U.S. tariffs, Mexican steel and aluminum exports to the U.S. market decreased by 29% and 20%, respectively, from January to July 2025.
