The centerpiece of the deal requires that steel exports from Mexico be melted and poured in the United States, Mexico, or Canada. Mexico also agrees to raise tariff rates on steel exports into Mexico from countries without free trade agreements.
Starting from July 10, 2024, all steel from Mexico must be melted and poured in Mexico, Canada, or the U.S. Any steel not meeting this requirement will face increased duties. Steel product imports from Mexico that are shown to be melted and poured in countries other than the United States, Mexico or Canada (USMCA) will now be subject to Section 232 tariffs. Products made with metal originating in China will be assessed a 25% tariff.
The U.S. Customs and Border Protection (CBP) will check where the steel is melted and poured to ensure compliance with the new rules.
In the proclamation, president Joe Biden says: “In my judgment, these measures will provide an effective, long-term alternative means to address any contribution by Mexican steel articles imports to the threatened impairment of the national security by restraining steel articles imports to the United States from Mexico, limiting transshipment, and discouraging excess steel capacity and production. The United States will monitor the implementation and effectiveness of the measures agreed upon with Mexico in addressing our national security needs, and I may revisit this determination, as appropriate.”
The U.S. Steel Manufacturers Association (SMA) congratulated U.S. trade negotiators after the announcement:
“The SMA supports the administration’s joint actions with Mexico today,” said SMA President Philip K. Bell. “Today’s announcement is the result of years of hard work by the Office of the U.S. Trade Representative. We are pleased that Ambassador Tai and her team negotiated an agreement that benefits domestic steel companies and workers while improving the trade relationship between the United States and Mexico. We appreciate USTR’s leadership, tenacity, and transparency with the steel industry throughout the process.”
“These are two important steps that SMA members have long advocated for and are critical to stopping unfairly traded steel crossing our border from Mexico,” Bell added. “We stand with the administration and hope for continued engagement between our two countries to enforce today’s agreement and continue work that prevents import surges.”
