The agreement between Mexico and the United States to exclude from Section 232 sanctions the steel exported by Mexico with Brazilian steel, prevented 40 percent of steel exports from being affected, said the CEO of Ternium, Máximo Vedoya, according to reports from the press.
“A large number of Mexican exports (of steel products) that go to the United States were punished,” Vedoya said, according to the Mexican newspaper El Universal. Vedoya spoke as President of the Chamber of the Processing Industry of Nuevo León (Caintra).
Last week (July 10), the White House announced an agreement with Mexico to impose a 25 percent tariff, under Section 232 of the Trade Expansion Act of 1962, on all exports of steel products whose raw material is not melted and cast in the USMCA territory.
A day later, the president of Mexico, Andrés Manuel López Obrador, said at a conference “it was agreed that Brazil will have special treatment in the case of steel imports.”
Later, the Mexican Ministry of Foreign Affairs reported that “An agreement was signed with the United States to design a mechanism so that Brazilian steel transformed in Mexico is not subject to tariffs; That is, the casting and casting requirements will not apply to products that come from that country,” the federal agency said in a press release.
The agreement will help Mexico meet the rule that will go into effect in 2027, that all steel in the USMCA region must be smelted and cast in one of the three countries to remain tax-free.
The Mexican government did not mention company names, but in the industry they know that the biggest beneficiary of the agreement with Brazil is Ternium because it imports steel from its subsidiaries in that country.
On repeated occasions, the CEO and president of the American steel company Cleveland-Cliffs, Lourenco Goncalves, has expressed his displeasure over Ternium's imports from Brazil.
In Mexico, businessmen in the steel sector expressed their concern for not knowing the scope of the agreement between the United States and Mexico regarding steel imports from Brazil. They do not know if it will be in general for the entire industry or it will only be a concession for Ternium.
According to El Universal, Vedoya praised the Mexican agreement to exclude Brazil because “many Mexican products that were being exported to the United States have this semi-finished product (steel from Brazil), because it is not produced in Mexico.”