Leaders from the United States, Mexico and Canada signed a new trade agreement between the countries, although the “new deal” lacks language to address the 25 percent import tariff on API X-52 line pipe from Mexico.
The agreement, which was signed by the Mexican President on his last day in office, has come with harsh criticism from the Mexican steel and manufacturing sector. Earlier this month, SteelOrbis reported that Mexican officials expressed a strong confidence that the steel tariffs would be lifted prior to the deal being signed.
Canadian Prime Minister Justin Trudeau has said that while the USMCA has not yet addressed the tariffs, that he is hopeful that the three countries can reach a deal soon.
Sources in Washington D.C. note that while the agreement still needs to be ratified by legislators in Mexico and Canada, which many believe will happen without fanfare, it may face steep challenges in the US, as the Democratic party will control the House of Representatives as of January 1.
For now, both US domestic and import API X-52 line pipe prices are stable; prices from Mexico are still holding at approximately $65 cwt. ($1,433/mt or $1,300/nt), FOB Texas, which includes the Section 232 tariff; prices from Mexico during the same reporting period last year trended at $46.50-$47.50 cwt. ($1,025-$1,047/mt or $930-$950/nt), FOB Houston.
In terms of the domestic market, sources have confirmed that US domestic prices for this same product continue to span between $64-$67 cwt. ($1,411-$1,477/mt or $1,280-$1,340/nt), ex-mill, although deals at the service center level are becoming increasingly prevalent.