LatinNews Daily - 12 July 2024

*Mexico’s foreign ministry (SRE) has released a statement saying that a new agreement with the US to apply tariffs to steel and aluminium shipments diverted through Mexico would “avoid impacts on the national steel industry”. The SRE statement came the day after the US administration of President Joe Biden announced a 25% tariff on steel arriving in the US that was not melted or poured in Mexico, the US, or Canada. The US also announced a tariff of 10% on aluminium imported from countries other than Mexico or Canada, as well as a 10% tariff on aluminium cast or smelt in China, Russia, Iran, or Belarus that arrives via Mexico. However, in its statement, the SRE said that an exception was negotiated for Brazilian steel processed in Mexico, which will not face tariffs. “This would fulfil the commitments of both countries under the US-Mexico-Canada Agreement (USMCA), which states that as of 2027 all steel exported to the US will be poured and cast in North America,” stated the SRE. The measures aim to prevent the circumvention of US tariffs by China in particular by diverting shipments through Mexico and ensure the long-term viability of North America’s steel and aluminium industries by preventing oversupply from China. López Obrador’s government has come under increasing pressure from the US to curb the triangulation of steel and aluminium products from China. In March China reiterated the strength of its relations with Mexico despite the implementation of tariffs on imports on steel balls and nails from China.