Mexican steel association Canacero has welcomed a decision by the federal government to take reciprocal measures against the United States following the imposition of Section 232 duties on steel imports from the country.
“According to a principle of complete reciprocity, the decision that Mexico adopts must contemplate a mirror measure, considering the same products and the same tariffs, without exceptions,” the group said late on Thursday May 31. “A minor decision would be unacceptable.”
Mexico’s economy secretariat said on Thursday that it would take reciprocal actions against the US, imposing equivalent measures against several products, including flat steel material.
Earlier on Thursday, US Commerce Secretary Wilbur Ross announced that the US would be imposing tariffs of 25% on steel and 10% on aluminium imports from Mexico, Canada and the European Union effective from June 1.
The duties imposed by the US will cost Mexico's steel industry $2 billion per year, according to Canacero.
The US decision to impose tariffs on Mexico-origin steel is a “meaningless” strategy and does not contribute to a positive environment in the North American region, the association said.
The prospects of a successful conclusion to the ongoing talks to renew the North American Free Trade Agreement (Nafta) have taken a heavy blow from US President Donald Trump’s decision on Thursday to impose duties on steel and aluminium products from Canada and Mexico.
Canacero also believes that Mexican authorities must continue looking at ways to be exempted from the US import duties, citing the quota systems agreed between the US and Argentina, Brazil and South Korea.
Moreover, Canacero has voiced concerns about the growth of redirected import flows into the Mexican market.
“Therefore, it is imperative to impose safeguard [measures] into steel imports from all countries without a trade agreement [with Mexico], with a percentage equal to that established by the US,” the group said. “In addition, it is important to establish a quota scheme for steel imports from countries with which Mexico has signed [trade] deals.”
In October 2017, Mexico extended - for the fourth time - a 15% tariff imposed on imports of slab, hot-rolled coil, heavy plate, cold-rolled coil and wire rod to protect the domestic steel sector. But the tariffs expired in April this year.
In late April, Latin American steel group Ternium said that the Mexican government was analyzing whether to renew the 15% duty against steel imports.