Mexico, US in Talks to Avoid 25% Steel, Aluminum Tariffs

Mexico is actively negotiating with the United States to prevent the imposition of a 25% tariff on steel and aluminum exports, set to take effect on Mar. 12, 2025. Minister of Economy Marcelo Ebrard confirmed that discussions with US trade officials will continue next week in pursuit of a resolution.

"We are in talks because there is no reason for these tariffs," said Ebrard. The measure, announced by the US government on Feb. 10, revokes exemptions previously granted under Section 232 of the 2018 trade agreement. Affected countries include Mexico, Canada, Brazil, Japan, South Korea, the United Kingdom, the European Union, and Australia.

While most Mexican exports remain tariff-free under the USMCA, Ebrard noted that around 10-12% of exports operate under the "most-favored-nation" clause. This mechanism allows countries to benefit from preferential conditions when they do not fully comply with the trade agreement’s rules of origin. 

"We will work with companies that cannot meet these regulations, mainly in the automotive and related industries," Ebrard explained.

The urgency of negotiations heightened after the US government announced a temporary suspension of new tariffs until Apr. 2, 2025, for goods exported under the USMCA. Ebrard emphasized that over half of Mexico’s exports are conducted through the agreement, with an increasing number of businesses aligning with its rules. "That figure could reach 85% or 90% in the coming weeks as more companies adapt," he predicted.

In addition, the US government announced a one-month suspension of tariffs on automobiles and auto parts from Mexico and Canada after discussions with major US automakers—General Motors, Ford, and Stellantis.