Mexico’s decision to impose an import tariff of up to 25 percent on a range of US steel products will likely have a marginal impact on the US GDP, according to credit rating agency Moody’s.
“In total, we estimate that up to $24 billion worth of exports may be affected, which represents just over 0.1 percent of US GDP,” Moody’s said.
“A fall in US imports of Mexican steel, aluminum and related articles ($8 billion) will partially offset the potential direct impact on US GDP. Therefore, the immediate direct effect for the US is likely to be marginal from a macroeconomic perspective,” Moody’s said.
Likewise, the US tariffs on Mexican steel will also “not have a material impact” on Mexico’s economic activity or exports “given that steel exports to the US only account for 1.6 percent of (Mexican) total exports.”
Moody’s said the measures, combined with a similar decision by Canada and the European Union will increase “significant and disruptive trade barriers.”