Mexico says crackdown on Asian steel shipments is paying off as US tariff talks advance

MEXICO CITY: Mexico is working to block steel from China and other countries from being rerouted through Mexico into the US under North America's trade pact, a Mexican official said on Wednesday, as the country presses Washington for relief from steel, aluminium and auto tariffs.

Luis Rosendo Gutierrez, Mexico's deputy economy minister for foreign trade, told journalists that the government had tightened traceability measures and was ensuring that products were not reaching the United States by exploiting Mexico's trade preferences.

Steel has become a politically sensitive issue in US-Mexico trade, with Washington determined to block Chinese goods and inputs from entering the US market through third countries.

"We want to guarantee — and we are guaranteeing — that there is no triangulation of steel or other products that reach the United States taking advantage of our trade agreement," Gutierrez said.

Gutierrez said Mexico had removed around 1,100 steel mills from its approved registry, many of them in Asia, after finding that they did not actually exist. The move helped cut steel imports from Vietnam by 80 per cent in recent months.

He added that Mexico had reduced steel and aluminium imports from third countries, including China, South Korea and India, by about 30 per cent, equivalent to some 13 billion pesos (US$698.54 million) in imports.

Mexico's priority, Gutierrez said, was to reduce the impact of US Section 232 tariffs on autos, steel and aluminium rather than focus on a broader review of the US-Mexico-Canada trade pact.

About 80 per cent of Mexican exports to the United States already enter tariff-free, he added.

Gutierrez said US officials had welcomed proposals from Economy Minister Marcelo Ebrard, and that Mexico hoped for positive news in the coming weeks before year-end.

Analysts argue that Mexico is not a hub for steel "transshipment", in which goods are routed through another country before reaching their final destination, typically to avoid tariffs.

Still, a report last month by Washington-based think tank the Center for Strategic and International Studies said certain goods may undergo significant processing in Mexico before being exported to the US, rather than simply passing through the country.