The administration of President Donald Trump plans to impose tariffs of 50% on Mexican steel and aluminum, which would represent a severe blow to the country's steel companies. This increase in taxes would imply an immediate rise in costs for these materials, jeopardizing the viability of Mexican steel mills and their final products in the U.S. market.
Researcher Carlos Alberto Bautista from the Business School at La Salle University explained that this decision, which would take effect from March 12 and increase from 25% to 50%, could lead to the bankruptcy of steel mills in Mexico. He illustrated this situation with the case of Altos Hornos de México, which relied heavily on steel exports to the U.S. and ultimately went bankrupt due to financial problems.
Most steel-producing companies in Mexico are closely linked to exports to the U.S. A possible scenario is a rise in the dollar due to tariff measures, which could lead to a new escalation of inflation in Mexico. This would negatively impact the country's growth expectations.
The Mexican steel industry is present in 11 states, such as Coahuila, Michoacán, Nuevo León, Guanajuato, and Veracruz, whose combined production represents 80.5% of the national total. The imposition of tariffs on steel imports from Mexico seeks to eliminate U.S. competitors and encourage domestic production.
The bankruptcy of steel mills in Mexico would result in declines in investments, steel and aluminum production, and would affect the labor market by causing unemployment in the domestic steel industry. Additionally, it could generate further problems arising from the deportation of Mexican migrants in the U.S. and would have both psychological and financial impacts on the country.
