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End 232 tariffs before USMCA: Concamin

Nov 15, 2018 | 12:45 PM | São Paulo | Renato Rostás

Tags  Mexico, United States, Canada, Nafta, Trump, Section 232, steel imports


Concamin, the Mexican Industrial Chambers Confederation, is urging the country’s authorities to negotiate an end to the United States’ use of Section 232 import tariffs, according to a November 14 letter.

Import tariffs applied by the US against Mexican steel were not discussed during the negotiations on the new agreement, according to Concamin. The confederation claimed that while US President Donald Trump’s administration increased its country’s tariffs, US steel faces no restrictions when entering Mexico.

Fastmarkets’ daily price index for US domestic hot-rolled steel sheet was $805.80 per short ton fob mill on November 14, up from $803.40 per short ton fob the day before. Prices have increased by 23.5% over the year to date, supported by the Section 232 tariffs.

Trump’s administration imposed a 25% duty on steel imports and a 10% tariff on aluminium imports from most countries this year, citing national security threats under Section 232 of the Trade Expansion Act of 1962.

“We see that US steel exports to Mexico have been stable, while Mexican steel exports to the US have fallen by 30%, deepening the trade deficit in this sector,” the Concamin letter said. “It’s not feasible to have a new trade agreement that aims for regional integration [that is also] limiting trade for key Mexican industries.”

Canacero, the Mexican steel industry association, asked its government to insist on full exemption from the Section 232 tariffs before signing the USMCA deal, which is intended to replace the North American Free Trade Agreement.

Mexico’s ministry of the economy should impose similar tariffs on US steel products until such time as an exemption is granted, Canacero added.

“When markets are hurt, regional integration’s value creation is inevitably eliminated,” the letter read. “[Mexico’s] steel industry does not pose a threat to US national security.”

The letter was intended to be read by Enrique Peña Nieto, the current president of Mexico, and Andrés Manuel López Obrador, the president-elect. Other recipients included the current secretary of the economy and his nominated successor, and the president of Mexico’s senate.

Canacero and the Canadian Steel Producers Association (CSPA) asked the three federal governments in North America on September 6 to remove trade barriers during the “new Nafta” negotiations.

On November 5, the Aluminum Association from the US, the Aluminium Association of Canada and Mexican aluminium institute Imedal issued a joint statement urging the elimination of tariffs within North America before the signing of the USMCA, which is scheduled for November 30.


 

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