President Trump’s June 1 proclamation restructures Section 232 metal tariffs into a tiered system through 2027, directly affecting Mexico’s steel sector, which operates at 55% capacity utilization with US-bound exports down 60% and 350,000 manufacturing jobs at risk. Mexico is pursuing tariff elimination through USMCA Joint Review negotiations while simultaneously imposing countervailing duties on Asian steel imports and tightening IMMEX oversight to prevent transshipment.

President Donald Trump signed a proclamation on June 1 modifying Section 232 national security tariffs on select steel, aluminum, and copper imports, reducing rates on some products while adding new categories to the tariff schedule. The changes take effect June 8 and remain in place through Dec. 31, 2027.

The decree reduces tariffs from 25% to 15% on certain steel and aluminum derivatives, including specific types of agricultural machinery and residential heating, air conditioning and ventilation equipment. Mobile industrial equipment, such as bulldozers and forklifts, will also face a 15% tariff “when imported from countries with trade agreements entitled to that treatment,” according to a White House statement.

Foreign companies may qualify for a 10% tariff rate if “their capital goods include at least 85% US-cast and poured, or melted and molded, steel or aluminum by weight,” the proclamation states. Two new product categories, steel shelving and aluminum lithographic plates, will be subject to 25% tariffs under the revised framework.

The White House said the adjustments are designed to remain in effect through the end of 2027 “to drive near-term investment that rebuilds the nation’s industrial base.”

A Tiered System Taking Shape

Monday’s decree is the latest adjustment to a Section 232 framework that the Trump administration has expanded significantly since 2025. In February of that year, the administration eliminated product- and country-specific exemptions accumulated under the Biden administration. Rates on steel and aluminum were raised to 50% in June 2025, and copper was added to the Section 232 program at the same rate in July 2025. The current structure now imposes 50% on steel, aluminum and copper products; 25% on derivatives; and 15% on metal-intensive industrial equipment, a tiered system that applies through 2027.

The White House also opened a partial relief mechanism in April 2026, publishing a measure in the Federal Register allowing certain steel and aluminum producers in Mexico and Canada to apply for tariff reductions under Presidential Proclamation 10984, provided they commit to expanding U.S. primary production capacity tied to automotive and medium- and heavy-duty vehicle supply chains. The adjusted rate under that mechanism cannot fall below 25%.

Mexico Absorbs the Impact

The cumulative effect of Section 232 tariffs on Mexico has been significant. Mexican steel exports to the United States fell 60% under the tariff regime, compared with a 13% decline for Canada and 30% for Brazil, according to data from the American Iron and Steel Institute. The value of Mexican steel exports to the United States dropped 12% between January and October 2025 versus the same period in 2024, according to Banco de México. Mexico’s steel sector is currently operating at approximately 55% capacity utilization.

In 2024, Mexican steel exports to the United States totaled US$3.53 billion, accounting for 11% of total US steel imports. Without broader intervention, officials have estimated that up to 350,000 jobs could be lost by the end of 2026, particularly in automotive manufacturing, which accounts for roughly one-third of Mexico’s total manufacturing employment.

Minister of Economy Marcelo Ebrard declared the tariffs unsustainable during the first formal USMCA Joint Review negotiating round in May 2026 in Mexico City. “We want the reduction, or outright removal, of all tariffs on products that comply with the rules of origin, including those imposed by the United States on steel and aluminum,” Ebrard said at the talks.

President Claudia Sheinbaum has also addressed the issue directly. “Our priority is clear. We will defend employment, support our industry, and demand fair conditions for trade. We seek a broad agreement with the United States that resolves current tensions and ensures long-term stability,” she said.

Mexico’s Parallel Response

As Washington adjusts its metals framework, Mexico has moved to protect its domestic steel industry on a separate front. The Ministry of Economy published a notice in the Official Gazette imposing provisional countervailing duties on hot-rolled steel imports from China and Vietnam, following an investigation initiated after a complaint filed in November 2024 by Ternium. Economy Minister Ebrard also permanently extended tariffs of 10% to 35% on steel from non-free trade agreement countries and tightened oversight of IMMEX and other special import regimes to curb transshipment of Asian goods through Mexico into the U.S. market.

Mexico’s Senate has outlined a harder line as well, emphasizing in a sectoral diagnostic submitted to President Sheinbaum the need to implement retaliatory measures if the United States does not remove Section 232 tariffs on Mexican steel.

National manufacturing losses during major outage events in the metals sector reach an estimated US$200 million per hour across the industrial base, underscoring the operational stakes for steel producers and manufacturers navigating an environment of both tariff pressure and supply chain disruption.

The USMCA Joint Review remains the primary diplomatic channel through which Mexico is seeking resolution, with tariff elimination on compliant goods as its central demand at the negotiating table.