AI-Based Sorting Solutions Enhance HDPE Scrap Purity at Eslava PlásticosMexican Steel Tariff Changes: Mixed Effects on Domestic Industry and Trade Dynamics

mexico tariff

Mexico’s New Tariff Plan and Its Objectives

Mexico has announced a new tariff plan targeting mainly Asian imports, with rates ranging from 10% to 50%. This policy includes a 50% tariff on Chinese cars starting in 2026, up from the current 20%. The government aims to reduce imports in favor of domestic production, particularly in steel, automotive, textile, and shoe industries. President Claudia Sheinbaum Pardo emphasized that these tariffs are imposed under WTO rules and cover 1,400 products to address trade imbalances.

Impact on Mexican Steel Market and Trade Relations

Currently, the US imposes a 50% tariff on Mexican steel and aluminum exports, alongside 25% tariffs on auto parts and vehicles. Mexican steel exports to the US have declined by over 20% year-to-date in 2025, while overall exports dropped 14.1%. Mexico’s tariff adjustments aim to increase local vehicle production and reduce reliance on imports. However, these measures have led to import price surges and decreased steel imports by around 13% in the first seven months of 2025.

Challenges and Future Outlook for Mexico’s Steel Industry

Despite tariffs and import restrictions under the Plan Mexico strategy, steel prices continue to fall. Industry stakeholders express concerns that higher tariffs may raise input costs and complicate supply chains. Meanwhile, the tariff revision is also seen as Mexico’s strategic move to align with the US ahead of the USMCA renegotiations. The overall effect on Mexico’s steel sector remains uncertain, balancing between supporting domestic production and managing short-term market disruptions.

ScrapInsight Commentary

Mexico’s tariff revisions present a complex scenario for its steel industry, offering protection but raising cost pressures. The declining export volumes and price drops suggest limited immediate benefits. However, aligning with US trade policies ahead of USMCA talks may strengthen Mexico’s regional trade position. Ongoing monitoring is essential to assess impacts on scrap steel demand, pricing, and circular economy goals.