Experts point out effects of steel tax

CIUDAD JUÁREZ (EFE).— Industrialists and foreign trade specialists said the announcement of a U.S. tariff on steel and aluminum from non-USMCA countries is a serious threat to the Mexican maquiladora industry, which represents 48% of formal employment in the main towns along the border.

This week, President Joe Biden announced a 25% tariff on steel not melted or poured in Mexico, and a 10% tariff on aluminum, without publishing any documents or giving details.

Thor Salayandía Lara, president of the Border Business Block, said that this is a hard blow to the maquila industry, which is already experiencing a decline in employment with the loss of more than 100,000 jobs over the last 10 months, just in border cities.

“All these investments in Mexico that have steel or aluminum as their main input are going to be complicated by this announcement that President Biden just made in the United States where he wants to impose tariffs or taxes,” said the coordinator of the Border Business Block.

He added that Mexico produces very little steel and aluminum, since the raw material is taken out but goes to other parts of the world to manufacture the steel or aluminum bars.

“If these companies that use a lot of steel are importing steel from China, it will hit them hard in terms of competitiveness, and employment will continue to decline and investments will continue to be driven away,” he said.

He added that this tariff is a severe blow to the competitiveness of companies that will now have to deal with new procedures and even change their supply chains and all their logistics and customs processes.

“Precisely for that reason, because we do not have a vision of an industrial policy that would involve manufacturing here,” he added.

José Castañón Sandoval, a logistics and tariff specialist at the Sertec Customs Agency, said that his clients in the maquila sector are very concerned, and that they cannot yet receive an answer because there has not yet been an official statement on this new tariff.

“Our economy, in (Ciudad) Juárez, in the state, and in Mexico, is closely linked to Asian products, specifically China. Products enter through the ports of Manzanillo, Ensenada, Long Beach, Los Angeles. This means that products arrive in Mexico to be manufactured and subsequently exported,” he added.

He explained that in this process, special tariff treatment is given to products made in Mexico because even if they have Chinese steel, the products qualify as originating from the T-MEC even if they contain non-originating inputs, such as steel.

The product is then exported, qualified, and that tariff is eliminated.

“It creates a lot of uncertainty in the region in Bajío, Querétaro, San Luis, Aguascalientes, Monterrey, Ciudad Juárez, the state of Chihuahua because we are very closely linked to products of Asian origin,” he said.

He added that applying a tariff on any product affects the final consumer, who has to pay a higher price due to the trade war initiated by the governments of their own countries.

DismissalsIllegal strike

A judge defines an illegal strike at ArcelorMittal and a steel company prepares layoffs

Processing layoffs

A federal judge has ruled that the occupation of the ArcelorMittal steel company’s facilities in the state of Michoacán by its workers since late May is illegal, while the company said it is already in the process of dismissing workers for this reason.

Main reason

The judge’s main reason for not accepting the strike notice requested by the Union of Mining, Metallurgical, Steel and Similar Workers of the Mexican Republic was that it occurred before the company and authorities were notified within the time established in Mexican labor laws.

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