Understanding the Global Steel Issue
Máximo Vedoya, CEO of Ternium, clarified that Mexico is not the origin of the steel problem. The current state of the steel industry is a result of China’s trade abuses, with subsidized steel driving global prices down and creating unfair competition. Vedoya made these remarks during an announcement regarding the expansion of services at the Roberto Rocca Technical School in Pesquería.
Strategic Investment and Clear Rules
Vedoya emphasized that Ternium’s investment in Mexico is strategic and long-term, but it requires clear rules and recognition from key trading partners that Mexico is part of the solution, not the problem. He highlighted that China’s excess capacity, fueled by subsidies and disregard for WTO rules, has negatively impacted global industries.
Vedoya expressed confidence in Mexico’s government actions, stating that President Andrés Manuel López Obrador and Secretary of Economy, Marcelo Ebrard, are working to address the steel tariff issue. He also praised Mexico City Mayor Claudia Sheinbaum’s efforts in this matter.
Collaboration for Technical Preparation
In addition to advocating for clear rules, Vedoya stressed the importance of educating young people. Ternium announced on June 6 that it will open a new area at the Roberto Rocca Technical School in Pesquería, starting August, to accommodate 128 first-year secondary school students on full scholarships.
Vedoya explained that China’s success in generating high-value jobs through education inspired Ternium to replicate this model. By growing alongside the community, Ternium aims to provide more opportunities for local residents.
- By August, 128 adolescents from Pesquería and nearby areas will begin their first year of secondary education.
- In three years, nearly 1,000 young individuals will be studying both secondary and pre-university levels.
Continued Investment Despite Tariff Increases
When questioned about the 25% tariff-induced drop in steel exports in April and the upcoming 50% tariff increase, Vedoya stated that the strategy should be decided by the Mexican government. He acknowledged that exports have slowed, with a 63% decrease in May, but stressed the necessity for clear rules and understanding from key trading partners.
Ternium remains committed to its $4 billion investment in the Pesquería Industrial Center, producing specialized steel that was previously imported. Vedoya concluded by saying, “This investment will continue, with part completion by year-end 2023 and the remainder in 2026.”
Key Questions and Answers
- Q: Is Mexico the cause of the steel industry’s problems? A: No, Mexico is not the origin of the problem. The steel industry’s issues stem from China’s trade abuses and subsidized, low-priced steel.
- Q: What is Ternium’s strategy amidst steel tariffs? A: Ternium seeks clear rules and recognition from key trading partners that Mexico is part of the solution, not the problem. They continue investing in the Pesquería Industrial Center.
- Q: How is Ternium contributing to community development? A: Ternium is investing in educating young people through scholarships at the Roberto Rocca Technical School, aiming to create more opportunities for local residents.
- Q: How will Ternium adapt to the upcoming 50% steel tariff increase? A: Ternium’s CEO, Máximo Vedoya, believes the Mexican government should decide on the strategy to address this issue, emphasizing the need for clear rules and understanding from trading partners.
