Mexico’s steel industry is being hit from both sides. To the north, the United States — once the destination for more than three-quarters of Mexican steel exports — slammed the door in June 2025 with 50% tariffs on imported steel, ending an exemption Mexico had enjoyed under USMCA since 2019. To the south and east, a flood of cheap Chinese-origin steel is arriving through indirect routes, undercutting domestic producers who cannot match the prices of state-subsidized mills operating with nearly 400 million tonnes of global overcapacity.
The Squeeze in Numbers
Between January and November, Mexican mills produced 15.5 million tonnes of finished steel, an 8.5% annual decline, according to Canacero, the national steel chamber. Overall steel consumption dropped roughly 10% over the same period — the 22nd consecutive month of declining demand, driven by weak construction activity and reduced industrial investment. Exports to the US fell 27% to 1.9 million tonnes, and Mexico’s share of the American steel market collapsed from 2.3% in 2024 to under 1% by mid-2025.
Meanwhile, imports kept flowing in from the other direction. Juan Antonio Reboulen Bernal, a senior executive at Grupo DeAcero, warned that imports now represent 40% of total steel consumption, up from 35%. The mechanism is triangulation: China exports semi-finished steel at below-market prices to countries such as Vietnam, Malaysia, Spain, Italy and even the United States, where the material is processed and then re-exported to Mexico under preferential trade agreements.
A Regional Problem
Mexico is not alone. Latin American imports of finished and semi-finished steel from China have surged 233% over the past 15 years, rising from four million tonnes in 2010 to 14.1 million in 2024, according to Alacero, the regional steel association. At a November summit, ArcelorMittal Brazil’s president warned that the region is experiencing “rapid deindustrialization” driven by state-supported Chinese production that local mills cannot match on price. Alacero estimates that 1.4 million direct and indirect jobs across the continent are at risk.
What Mexico Is Doing About It
The government has responded on multiple fronts. In early 2025, the Economy Ministry issued NOM 251, a long-awaited quality standard requiring all construction steel — domestic and imported — to meet specific technical specifications starting in August. The regulation addresses a practice Reboulen described as widespread: some importers selling rebar of the same thickness and price as domestic competitors but with less weight per unit, effectively cheating buyers. In December, Congress approved tariff increases on more than 1,400 goods from non-treaty countries, raising duties on steel products to 20–50%. The government also cancelled registrations of foreign mills found to be circumventing trade rules.
Domestic producers are investing too. Canacero says the industry has committed roughly $8 billion to productivity and capacity upgrades, and companies like DeAcero and ArcelorMittal Mexico are expanding rolling mills and mining operations to reduce import dependence. Mexico’s steel sector has a structural advantage in sustainability: 93.5% of its production uses electric arc furnaces powered largely by recycled scrap, giving it a lower carbon footprint than blast-furnace-dependent Asian competitors.
The Gap That Remains
Industry leaders say the tariffs are a start but not enough. DeAcero’s Reboulen argues that stricter customs enforcement, tighter origin certification for foreign producers and an update to Mexico’s import and export tax law are all overdue. The irony is hard to miss: Mexico is celebrating record foreign direct investment driven by nearshoring while watching one of its foundational manufacturing sectors shrink under the weight of the same trade wars redirecting capital its way. North America produced 106 million tonnes of steel in 2024 against consumption of roughly 130 million — a deficit that China is more than happy to fill.