To "allow the recovery of the national industry," the Mexican government decided to apply temporary tariffs of 25 percent to the importation of 201 items related to steel from countries with which Mexico does not have a trade agreement, a tax that will remain until July of 2025, according to the presidential decree published by the Ministry of Economy, yesterday afternoon in the official government gazette (DOF).
"This decree enters into force on August 16, 2023 and ends on July 31, 2025," the publication states.
The federal government's support for the recovery of the national productive plant, affected by the Covid-19 pandemic, through temporary taxes is for 392 tariff items related to steel, aluminum, bamboo, rubber, chemical products, oils, soap, paper, cardboard, ceramic products, glass, electrical material, musical instruments and furniture. The tariff ranges from 5.0 to 25.0 percent.
In a SteelOrbis analysis of the presidential decree, it appears that there are 91 tariff fractions of Chapter 72 of the General Import and Export Tax Law (LIGIE) and 110 tariff fractions of Chapter 73.
Chapter 72 is the one referring to foundry, iron and steel, and Chapter 73 is the one related to the manufacture of foundry, iron or steel. That is, 51.3 percent of the total tariff fractions with the temporary tax correspond to the steel industry.
The highest authority of Mexican international trade, the Ministry of Economy, said that it took into account the information from the 93rd session of the Steel Committee of the Organization for Economic Cooperation and Development, held on March 13 and 14, 2023, which He highlighted the global excess capacity for steel production, which aggravates the pressure to dispose of production surpluses.
In order not to affect other productive chains with the temporary tariff, including the most sensitive ones such as electrical, electronic, automotive and auto parts, the tariff benefit of the Sectoral Promotion Programs applicable to tariff fractions of various steel products will be maintained.
The decree states that the import of tariff items 7210.70.02 (painted or coated sheet with a width greater than or equal to 600 mm) and 7212.40.04 (painted or coated sheet with a width of less than 600 mm) will have a 10 percent tariff until December 31, 2023 and from January 1, 2024 and July 31, 2025, the 25 percent tariff will be applied
The authority reported that the decree of November 18, 2022, which established a temporary tariff of 15 percent on 112 tariff items related to various products of the steel sector, is repealed, with a tariff reduction scheme until October 1, 2024.