Mexico To Propose Joint Steel Committee With United States To Strengthen Bilateral Relations

According to Bloomberg, a senior Mexican trade official revealed that Mexico will propose restarting the North American Steel Council, aiming to improve trade relations with the United States and reduce dependence on steel imports from Asia.

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Luis Rosendo Gutiérrez Romano, Mexico's Deputy Secretary of Economic Affairs responsible for trade, stated that during the negotiations with the United States on steel tariffs, Mexico plans to propose the establishment of a reconstruction committee. This committee will be composed of steel companies from both Mexico and the United States, as well as trade officials from both governments. Although the current negotiations focus on bilateral relations, the committee proposal envisions including Canada in the future.

Luis Rosendo Gutiérrez Romano pointed out that this committee will be similar to the original North American Steel Trade Committee under the framework of the North American Free Trade Agreement (NAFTA, the predecessor of the current United States-Mexico-Canada Agreement, USMCA). Its core mission is to build a stronger regional industrial ecosystem and it will include participation from the private sector, rather than relying solely on intergovernmental negotiations.

For example, the committee will consider measures to encourage Mexico to increase its purchases of American steel as a substitute for steel imported from Asia. Luis Rosendo Gutiérrez Romano (regarded as Mexico's second most important trade negotiator) stated that this move may allow Mexico to raise tariffs on steel imported from Asia.

Luis Rosendo Gutiérrez Romano said: "The United States has a very positive attitude towards this, and so do we, because both sides must work together. We are studying a series of trade initiatives to strengthen the region, protect regional interests, and jointly formulate common policies that will help grow the industries of both sides."

In response to U.S. concerns, in addition to the joint committee proposal, Mexico has shut down 1,062 so-called "ghost" Asian steel plants—these establishments were registered as steel factories but had no actual steel production operations, serving merely as fronts to disguise foreign steel imports. Of these, about 40% are related to China, 10% to India, and 6% to Iran.

Luis Rosendo Gutiérrez Romano also mentioned that the Mexican government is exploring ways to increase domestic steel consumption through national policies, such as encouraging the domestic construction industry to commit to purchasing locally produced steel, in order to offset a possible 5% to 10% decrease in steel exports to the United States.

At the time the above proposal was put forward, Mexico and the United States were engaged in negotiations over tariff policies, including the imposition of punitive tariffs of up to 50% on Mexican steel and aluminum. Such tariff measures have already forced some steel producers to suspend planned investments; for example, Brazilian steel company Gerdau SA canceled a planned special steel plant project with an investment of $600 million.

Luis Rosendo Gutiérrez Romano stated that Mexico is prioritizing negotiations to reach an agreement that reduces tariffs on automotive, steel, and aluminum products. He pointed out that whether the planned steel investments will be withdrawn or even increased depends entirely on the final terms of the possible steel agreement. He said, "These investments might flow to other regions or might double in growth. This is a topic we are highly concerned with, and we will continue to focus on it to promote tariff reductions."