Mexico Loses US Steel Market Share Amid Tariff Changes

Mexico’s share of US steel article imports fell from 11% to 9% in 2025 as Section 232 tariffs reshaped sourcing patterns. The decline adds urgency to Mexico’s push for tariff relief and stricter regional origin rules ahead of the USMCA review.

Mexico’s position as one of the leading suppliers of steel products to the United States weakened in 2025, with its share of US imports declining despite the continued integration of North American manufacturing supply chains. The decline comes as the United States expands Section 232 steel tariffs while Mexico simultaneously seeks to eliminate those duties through the ongoing USMCA review.

According to data from the US International Trade Commission (USITC), the United States imported US$22.85 billion in iron and steel articles (HTS Chapter 73) in 2025. Canada remained the largest foreign supplier, accounting for US$4.54 billion, or roughly 18% of total imports, while Mexico supplied US$2.23 billion, representing approximately 9% of the market. Mexico’s share fell from about 11% in 2024, while Canada’s declined from 21%, indicating that other exporting countries captured a larger portion of US demand.

The figures exclude primary steel products and focus on manufactured steel articles, including pipes, fasteners, structural components, and other downstream products.

Tariff Changes Continue to Reshape Trade

The decline coincides with significant changes to the United States’ Section 232 tariff regime. Initially introduced to protect domestic steel production, the measures have expanded considerably during 2026. In April, the US government modified the tariff framework so that many derivative products containing steel became subject to duties based on the value of their steel content rather than only the underlying material. The administration also introduced different treatment depending on the amount of steel incorporated into finished products and created temporary relief for selected industrial equipment through 2027.

The policy was adjusted again in June, reducing the North American steel-content threshold required for preferential treatment from 95% to 85%, while maintaining incentives for products manufactured with predominantly US, Mexican, or Canadian steel. The changes are intended to encourage regional sourcing while limiting the use of steel originating outside North America.

According to the Congressional Research Service (CRS), the expanded tariff regime has generated mixed reactions. US steel producers argue that the measures encourage domestic investment and support employment, while manufacturers that consume steel warn that higher input costs reduce competitiveness and increase production expenses across industries ranging from automotive manufacturing to construction.

Canada has maintained retaliatory tariffs on approximately US$11.13 billion worth of US steel and aluminum products, further illustrating how the dispute has evolved beyond bilateral trade measures into a broader regional challenge.

Steel Tariffs Become a Central USMCA Issue

Mexico’s declining market share comes as steel tariffs have become one of the country’s principal priorities in the ongoing review of the USMCA. The Mexican government has repeatedly argued that Section 232 tariffs undermine North American manufacturing integration by increasing costs for industries that depend on highly interconnected supply chains. Steel and aluminum have become key discussion points during negotiations with US officials, alongside automotive rules of origin and broader industrial policy. Recent negotiation rounds have also focused on strengthening regional manufacturing and reducing dependence on suppliers outside North America.

As previously reported by MBN, Mexico has proposed adopting a tariff framework similar to the agreement reached between the United States and the United Kingdom. Under that model, tariff-free access would be conditioned on strict origin verification and melt-and-pour requirements, ensuring that only steel genuinely produced within trusted supply chains qualifies for preferential treatment. Mexican officials argue such an approach would strengthen regional manufacturing while preventing transshipment of steel originating from countries outside North America.

Industry representatives have likewise supported replacing blanket tariffs with mechanisms that distinguish trusted regional producers from unfairly traded imports. They argue that integrated North American supply chains should not face the same restrictions applied to steel originating from countries with excess production capacity.

Although Mexico remains among the United States’ largest suppliers of steel products, the latest trade data suggests that tariff uncertainty and shifting sourcing patterns are already affecting its competitive position. Whether the ongoing USMCA negotiations produce meaningful relief for steel exporters could play a significant role in determining how North American supply chains evolve over the coming years.