Mexico Weighs Response to US Steel, Aluminum Tariffs

The Mexican government is assessing potential responses to the US decision to impose tariffs on steel and aluminum imports, as industry leaders warn of significant economic repercussions. Minister of Economy Marcelo Ebrard says that consultations with affected Mexican industries would begin on March 14. Meanwhile, President Claudia Sheinbaum confirms that any retaliatory measures would be decided after April 2, when the US administration is set to unveil additional trade policies.

“Applying tariffs affects multiple industries due to our economic interdependence,” says Ebrard. The tariffs imposed by the United States on March 12 could cost Mexico at least US$18 billion, according to a Banamex study.

Despite calls from the National Chamber of the Iron and Steel Industry (CANACERO) to impose reciprocal tariffs, the Ebrard says that Mexico will not act hastily. “There are many measures available, but we will not take them impulsively. We will consult with stakeholders and prepare our response based on what benefits Mexico,” he says. The consultations will include companies such as Mabe, which recently announced a US$668 million investment in Mexico.

“We will not take actions without considering the implications beyond April 2. This week, we will engage in intensive discussions to secure the best possible position for Mexico,” says Ebrard. President Sheinbaum echoed this approach, stating: “We will wait until April 2 to determine whether to apply reciprocal tariffs on steel and aluminum.”

The heavy vehicle manufacturing sector is particularly concerned about the potential consequences of tariffs. According to Rogelio Arzate, President, National Association of Bus, Truck, and Tractor Producers (ANPACT), tariffs could increase the cost of heavy vehicles in the United States by an average of US$35,000. In Mexico, the impact could be even greater, with potential price hikes of up to US$50,000 per unit.

“Tariffs create a chain reaction, affecting transportation and logistics, ultimately impacting consumers. The impact could reach US$10,000 per vehicle, excluding exchange rate fluctuations,” Arzate explains. He highlights that components used in Mexican-manufactured vehicles cross the border multiple times, accumulating tariffs at each stage.

“This year, we expect declines in sales due to factors such as new technology regulations and economic slowdown, compounded by uncertainty surrounding US tariffs,” says Guillermo Rosales, President, Mexican Association of Automotive Distributors (AMDA). The first two months of 2025 already reflected economic uncertainty in the heavy vehicle sector.

While Canada has announced retaliatory tariffs, imposing a 25% duty on US$20.7 billion worth of US products, Mexico has so far refrained from similar measures. “Mexico and the United Kingdom have chosen not to respond with tariffs, unlike Canada. Those that escalate trade disputes risk a strong response from President Trump,” says Howard Lutnick, US Secretary of Commerce.?