Mexico says crackdown on Asian steel shipments is paying off as US tariff talks advance

Mexico is successfully curbing the flow of steel shipments from China and other countries through Mexico into the US under the North American trade pact, a Mexican official announced on Wednesday, according to wire service reports. Deputy Economy Minister for Foreign Trade Luis Rosendo Gutierrez explained that the government has implemented stricter traceability measures and is working to prevent products from circumventing Mexico's trade preferences to avoid US tariffs on steel, aluminium, and automobiles.

The US has been pushing to stop Chinese steel and other inputs from entering the US market through third countries, highlighting the political sensitivity surrounding the issue. Gutierrez stated that Mexico aims to ensure no steel or other products are routed through Mexico to reach the US.

Recently, Mexico removed approximately 1,100 steel mills from its approved registry, many of which were in Asia, after identifying them as fictitious. This action contributed to an 80% reduction in steel imports from Vietnam over recent months. Additionally, Gutierrez reported that Mexico has decreased steel and aluminium imports from third countries, including China, South Korea, and India, by around 30%, equivalent to approximately 13 billion pesos (US$698.54 million) in imports.

According to Gutierrez, Mexico's top priority is to mitigate the impact of US Section 232 tariffs on automobiles, steel, and aluminium rather than undertake a comprehensive review of the US-Mexico-Canada trade agreement. Notably, about 80% of Mexican exports to the United States currently enter tariff-free. Gutierrez also noted that US officials have endorsed proposals from Economy Minister Marcelo Ebrard, and Mexico anticipates favorable developments in the coming weeks before year-end.