Mexican steel imports into the United States will now be subject to 25% Section 232 tariffs unless proof is provided that the products were melted and poured in North America.

A White House statement said that the tariff’s new application, announced on July 10, will eliminate the transshipment of material to the US, via Mexico, from countries without an exemption to the trade defence regulation. It will also discourage “excess steel capacity and production”, it said. 

This could exert upward pressure to US steel prices as demand recovers. However, MEPS respondents do not expect steel supply or prices to be significantly affected in the near term. The White House estimates that just 13% of US steel imports from Mexico are melted and poured outside North America. 

Furthermore, some Brazilian steel could also be exempt from the new melt and pour rules. On July 11, the Mexican government stated that an agreement had been reached with the US to “design a mechanism ensuring that Brazilian steel processed in Mexico will not be subject to tariffs”. There is no detail on a timeline for this process.