The President of the United States, Donald Trump, has declared an economic emergency by imposing a 10% tariff on all imports from China and a 25% tariff on imports from Mexico and Canada. This measure affects the three largest trading partners of the United States and covers a wide range of products, from Canadian oil and lumber to agricultural products, clothing, and auto parts from Mexico, as well as plastics, textiles, and computer chips from China.
Trump's order did not include mechanisms to grant exceptions to U.S. importers, which has raised concerns in various industries that depend on these imports. Canada, for example, supplies more than 4.3 million barrels of oil daily to the United States, leading companies like Ternium to assess the possible impacts of this measure on the market.
In response to the tariffs imposed by the United States, Mexico and Canada have announced retaliatory measures. Mexican President Claudia Sheinbaum ordered immediate retaliatory tariffs, while Canadian Prime Minister Justin Trudeau has promised to impose a 25% tariff on U.S. imports worth up to $155 billion, urging Canadians to prefer local products.
Despite the uncertainties generated by these measures, Ternium anticipates a slight recovery in its quarterly earnings, thanks to better margins and more stable shipments. The company is hopeful that reasonable trade agreements will be reached between the United States, Mexico, and other countries affected by these tariffs, despite the current tension in international trade.
Additionally, China has announced that it will file a complaint with the World Trade Organization for what it considers wrongful practices by the United States. Despite the situation, Ternium has no plans to reduce its investments in Mexico and expects a recovery in its earnings in the next quarter.
