Awaiting U.S. Trade Policy Decisions: Perspectives from Mexico and Brazil
brazil and Mexico, leading exporters of steel to the United States, are taking a wait-and-see approach regarding potential tariffs on steel and aluminum imports. This cautious stance was communicated by officials from both nations as they look for signals from President Trump, who is anticipated to announce new trade measures.
Forecasts of Increased Tariffs
On Monday, President Trump is expected to unveil a considerable increase in tariffs—perhaps setting them at 25% on all imports of steel and aluminum into the U.S., further complicating an already tense trade habitat.This move would bolster existing tariffs aimed at rejuvenating domestic production as many American mills have ceased operations in recent years.
Responses from Leadership
Claudia Sheinbaum, President of Mexico, stated during a press conference that her governance intends to ”wait for today’s announcements before making any decisions moving forward.”
In Brazil, Finance Minister Fernando Haddad expressed a similar sentiment. He emphasized that his government would refrain from commenting untill they have concrete details rather than reacting based on what he termed “potential misinterpretations” following initial reports claiming Brazil might tax U.S. tech firms as retaliation against steel tariffs—a claim Haddad dismissed as inaccurate.
The Context of Previous Measures
During his first term, President Trump established 25% tariffs on steel and 10% on aluminum imports; however, both Mexico and Brazil were later granted exemptions. Major players in these countries serve the American market heavily.
A Look at Ternium’s Operations
Ternium is notably significant within this context; it recorded shipments reaching an impressive 4.1 million metric tons in just one quarter last year within Mexico alone.A major supplier for U.S.-based automakers manufacturing cars domestically—ternium is currently constructing an additional plant in northern Mexico dedicated to servicing requirements outlined under the trilateral trade agreement with Canada and the United States.
The Market Reaction
Ternium’s stock listed on New York exchanges saw an uptick of 0.8% by midday Monday while Usiminas’ shares experienced about a 2% rise in Brazilian markets despite only minimal exports outside thier home country.
Brazilian multinational Gerdau stands poised to gain significantly from potential tariffs due to its operational base within North America—boasting eleven production facilities across the region—with its share prices surging over 4%.
The Challenge of steel Dumping Practices
A pervasive issue troubling global leaders within the steel industry is China’s alleged practice known as “dumping,” where excess steel inventory is sold internationally below market value prices.
This has prompted both Brazil and Mexico to impose double-digit tariffs recently against Chinese imports while Brazilian manufacturers are lobbying for even steeper levies against wholesale dumping practices that disrupt local markets.
Tensions Over Steel trade Origins
Past accusations leveled by Trump suggested that Mexican channels facilitated Chinese access into U.S.’s marketplace unnoticed—claims echoed during Biden’s presidency thru similar concerns regarding whether certain Mexican-origin shipments had Chinese roots instead.
The mexican economy ministry introduced new tracking mechanisms last week designed specifically for monitoring import/export transactions related to steel alongside their countries of origin—a proactive measure aimed at mitigating unauthorized trading practices.
