Mexico Seeks Lower US Steel Tariff, Weighs China Levies

Mexico · Trade

Mexico is fighting a two-front battle over steel: Economy Secretary Marcelo Ebrard wants Washington to cut the punishing 50% tariff on Mexican steel, even as the United States presses Mexico to raise its own walls against cheap Chinese metal.

Two negotiations at once

Ebrard, who heads Mexico’s Economy Ministry, is running parallel tracks inside the review of the USMCA trade pact (known in Mexico as the T-MEC). On one side, he is trying to bring down the 50% US tariff that now hits Mexican steel — a burden he calls unfair given that Mexico is the top buyer of US steel products. On the other, he is fielding a US request to align Mexico’s tariffs with Washington’s on Chinese steel and aluminum.

The simultaneous talks highlight the unique leverage both sides hold as the USMCA review advances, forcing Mexico to defend its supply-chain integration while addressing US concerns about Chinese circumvention. Ebrard’s team has framed the conversations as a chance to reaffirm the pact’s original intent of making North America a unified manufacturing block, even as both nations grapple with the distorting effects of global steel overcapacity.

The 50% problem

The headline grievance is the 50% rate. Ebrard’s stated goal is parity with the United Kingdom, which has negotiated a far lower US steel tariff of around 10%. Mexican steelmakers, represented by the industry chamber Canacero, have watched the sector slide under the weight of US duties, and Mexico City argues that a deeply integrated North American supply chain should not be taxed as if it were a strategic rival.

Mexico’s steel exports to the United States once moved nearly duty-free under earlier trade rules, and the current 50% level is the legacy of a Section 232 national-security decree that predates the USMCA. Industry executives argue that taxing Mexican steel at such a rate burdens American manufacturers who rely on just-in-time deliveries of specialized automotive and energy-grade products, and undermines the competitiveness of regional supply chains that support millions of cross-border jobs.

The China question

The harder ask comes from Washington: replicate US tariffs on Chinese metal so that North America presents a united front. Ebrard has been careful to say Mexico “has nothing against China,” but has signaled willingness to explore the proposal as part of a broader deal. That balancing act — protecting Mexican industry and USMCA access without needlessly antagonizing a major trading partner — is the core tension of the talks.

Mexico already applies anti-dumping duties on certain Chinese steel products, including wire rod and welded tube, but a blanket tariff alignment would mark a significant escalation. Such a move would need to be carefully calibrated to avoid spiking costs for Mexican construction and manufacturing firms that have come to depend on Asian imports for price-sensitive projects.

What happens next

By Ebrard’s account, the immediate trigger is in Washington’s hands: US authorities are due to define, in the first week of August 2026, the criteria for a Section 301 investigation into excess productive capacity. That decision could rearrange the tariff map for Mexico and set the terms for the next phase of the USMCA review.

A Section 301 investigation could lead to new U.S. duties on countries deemed to subsidize excess steel capacity, potentially reshaping global trade flows well beyond the North American market. Mexican officials hope that demonstrating proactive measures to screen Chinese metal will help persuade Washington to lower the bilateral tariff, returning the relationship to a more reciprocal footing.

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Frequently Asked Questions

What is Mexico trying to change on steel tariffs?
Ebrard wants to lower the 50% US tariff on Mexican steel toward the roughly 10% rate the US grants the UK.

Why is China part of the talks?
The US has asked Mexico to match its tariffs on Chinese steel and aluminum; Mexico says it is willing to explore the idea within a broader deal.

What happens next?
Washington is due to set the criteria for a Section 301 excess-capacity probe in the first week of August 2026.

The outcome of these talks will influence more than just steel prices; it will test whether the USMCA can adapt to a world in which the United States increasingly ties market access to shared industrial-security goals. For Mexico, the challenge is to secure a competitive edge for its mills without sacrificing the diversification that has helped its economy weather global supply shocks and maintain the flexible access to Asian inputs that keeps its manufacturing costs in check.

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