How growing U.S.-Mexico tensions over China impact stainless steel?

In 2024, steel trade relationships between Mexico and its close trade partners under the United States-Mexico-Canada Agreement (USMCA) have been heated due to the surging country’s trade with China.

More and more North American politicians and industry leaders, including those from the stainless steel sector, are calling for stricter measures against imports of steel and other industrial products from Mexico. They view Mexico as a gateway for tariff-free imports from China and other Asian countries into the North American market. Chinese suppliers have been sending increasing quantities of products to Mexico, making minor modifications, and then exporting them to the U.S. This allows them to bypass the 25% tariffs under Section 232 and other trade barriers.

Additionally, many Chinese companies have relocated production facilities to Mexico, especially in the automotive sector, aiming to reduce supply chain risks and use Mexico as a base for reaching previously restricted markets. Mexico’s strategic location, trade agreements, and relatively low labor costs make it an appealing hub for such operations.

Currently, those practices have primarily spared the stainless steel industry. However, the push for preventive measures is growing, with more voices advocating action to address these concerns. Continue Reading? Please click box below!