Key Points
— Mexico’s steel industry is operating at approximately 55% of installed capacity — the lowest level in 25 years — as US Section 232 tariffs of up to 50% on finished steel and aluminum products crush export competitiveness
— Steel exports fell 53% in 2025 and production of finished products dropped 8.1% to 16.8 million tons — levels last seen over a decade ago, according to Canacero’s new president Sergio de la Maza Jiménez
— Economy Secretary Marcelo Ebrard has made tariff removal a top priority in TMEC renegotiations, arguing Mexico is “part of the solution, not the problem” in North American steel supply chains
The Mexico steel tariffs crisis has moved from a trade irritant to a structural threat. With capacity utilization at a quarter-century low and exports in freefall, the industry that underpins Mexico’s manufacturing base is being hollowed out by the same tariffs that Washington says protect American national security.
The numbers were laid out at Canacero’s 78th Assembly by new president Sergio de la Maza Jiménez: 55% capacity utilization, 53% export decline in 2025, and an 8.1% drop in finished steel production to 16.8 million tons, as reported by El Financiero and CNN en Español. The crisis deepened on April 2 when Trump signed a new proclamation under Section 232 that raised tariffs to 50% on the total value of products made primarily with steel, aluminum, and copper, and 25% on derivatives. The change eliminated a prior mechanism that allowed tariffs to be calculated only on metallic content — a shift that substantially increased the effective rate on Mexican exports, according to Pacozea’s analysis of the proclamation.
De la Maza Jiménez told the assembly that the tariffs “have limited our competitiveness as Mexican producers within the North American market.” He noted the industry had not seen such low utilization rates since the late 1990s. Domestic consumption fell 10.1% in 2025 — the sharpest decline in recent history — compounding the export collapse with a weakening internal market. The OECD estimates global steel overcapacity at 680 million metric tons, projected to reach 721 million by 2027, creating a structural glut that makes price recovery unlikely even if tariffs are adjusted.
The Negotiating Table
Economy Secretary Ebrard has placed steel tariff removal at the center of TMEC renegotiations, describing Mexico as part of the North American supply chain solution. The argument has some traction: US Trade Representative Jamieson Greer acknowledged the administration is open to adjustments. But the American Iron and Steel Institute has told Washington that the tariffs remain “an essential tool for protecting national security,” and the US siderurgical lobby shows no sign of yielding.
For Mexico, the steel crisis is a preview of what broader tariff escalation could do to the manufacturing sector that has been the engine of nearshoring investment. If 50% tariffs can reduce a major industry to 55% capacity utilization in under two years, the vulnerability of Mexico’s export model to unilateral US trade action is no longer theoretical — it is measured in shuttered furnaces and idled production lines.