Mexico Pushes for UK-Style Steel Tariffs Ahead of USMCA Round

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Mexico is pressing Washington to lower Section 232 steel tariffs from 50% to the 10% rate applied to the United Kingdom, arguing its trade surplus position with the US undercuts the rationale for the duty. The request forms a core element of Mexico's agenda for the September USMCA joint review round in Washington, D.C., alongside a separate, pending Section 301 ruling on structural excess manufacturing capacity. Steel producers, automakers, and auto parts suppliers face direct exposure, as existing tariffs have already cut Mexico's steel exports to the US by 36.6% in 2025.

Mexico's government wants Washington to grant it the same steel tariff treatment it extends to the United Kingdom, as the country heads into the next round of the USMCA joint review this September. Economy Minister Marcelo Ebrard laid out the goal, framing it as a central plank of Mexico's trade strategy heading into the fall talks in Washington, D.C.

Ebrard's argument rests on a simple statistic he has repeated throughout 2026: Mexico buys more US steel than any other country, making it the trading partner with which the United States runs its largest steel surplus. Despite that, Mexican steel exports to the US remain subject to the 50% duty imposed under Section 232, compared with the preferential 10% rate Washington applies to UK steel. Ebrard argued that Mexico's purchasing pattern undercuts the premise of the tariff, since the US benefits from a trade surplus with Mexico in the sector rather than facing a threat from it.

The minister said Mexican industry has spent the past several years investing in domestic smelting and processing capacity specifically to avoid triggering US tariff action, a strategy he described as consistent since 2018. He added that Mexico has already secured a preferential negotiating position relative to other US trading partners, a result he credited to direct engagement between Mexican officials and President Trump.

Steel Damage Already Visible

The push for parity comes against a backdrop of measurable losses. Section 232 duties of 50% on steel and aluminum, layered on top of 25% tariffs on automotive goods that miss USMCA content thresholds, have cut Mexico's steel exports to the United States by 36.6% in 2025 and pushed domestic steel capacity utilization down to 55%.

Automotive shipments fell 5.1% year-over-year in the first four months of 2026. Ebrard has previously called the 50% steel and aluminum tariffs "unsustainable" during the first formal USMCA negotiating round in May, warning that continued duties threaten up to 350,000 manufacturing jobs tied to the automotive supply chain.

Narrowing the Agenda Ahead of September

Ebrard noted that the most recent round of talks closed without any change to Mexico's tariff status following new Section 301 measures, leaving September's session in Washington as the next opportunity to make progress.

Mexico Business News has tracked how the country's list of outstanding demands has shrunk as the review process advances: officials say the number of unresolved US demands fell from 54 to 14 between the 2025 and 2026 review cycles, with Mexico presenting 13 of its own concerns in return, centered on steel, aluminum, automotive tariffs and the Rapid Response Labor Mechanism.

That narrowing agenda reflects a broader pattern Ebrard has described throughout the review: each round eliminates issues already resolved, leaving a smaller set of contested points for subsequent sessions unless new disputes emerge. Talks are continuing despite public skepticism from President Trump about the agreement's future, with roughly 85% of Mexico's exports to the US still entering duty-free under USMCA rules of origin, a figure Ebrard says US negotiators have accepted as part of the bilateral dialogue.

Wider Tariff Backdrop

The steel dispute is unfolding alongside a separate and broader threat: a pending US Section 301 determination on structural excess manufacturing capacity across 16 economies, including Mexico, China, the European Union, Japan and South Korea. Mexico Business News has reported that USTR is nearing a ruling on the excess-capacity probe, with new tariffs possible as soon as August, a decision that could land before or alongside the September USMCA round. Automotive, machinery, computing, industrial equipment and medical device sectors face the greatest exposure if the investigation results in fresh duties.

Ebrard's comments suggest Mexico intends to arrive in Washington with a consolidated position across both tracks, the ongoing USMCA joint review and the separate Section 301 exposure, rather than treating them as unrelated processes.

The minister said the September round will be decisive for preserving Mexico's relative standing compared with other US trading partners, reiterating the government's central claim: that as the largest buyer of US steel and Washington's top trading partner overall, Mexico's exporters should not face the same tariff burden as countries the US treats as competitive threats.

Whether that argument succeeds will depend on findings USTR has not yet published. For now, Mexican officials are treating the gap between the 50% rate they pay and the 10% rate applied to UK steel as the clearest evidence that the current tariff structure is not calibrated to actual trade dynamics, and the clearest opening for negotiation in September.

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