Mexico to require federal projects to use local steel in response to US tariffs

Mexico's President Claudia Sheinbaum on Wednesday announced a rule that all federal work projects use steel from Mexican companies, after attempts to reach a deal to lift U.S. steel tariffs failed. 

"The commitment we are making here is that the government's purchases will be steel produced in Mexico," Sheinbaum said during her daily morning press conference.

The president's initiative is one of the first public efforts by the Mexican government to reduce its economy's enormous dependence on the U.S. While Trump's global tariffs have inspired other countries, such as Canada, to try to scale back their dependence on the U.S., Mexico has previously been reluctant to take steps that could irritate its largest trading partner, and the destination of 80% of its exports.

Sheinbaum's move comes amid the review of the U.S.-Mexico-Canada Agreement. Trump's sweeping tariffs included 50% tariffs on steel and aluminum imposed last year.

Mexican officials have repeatedly said the tariffs are unfair, in part because the United States runs a trade surplus with Mexico in steel and aluminum.

Mexico's automotive and steel industries ship more than 50% of their exports to the world's largest economy.

Mexico has been seeking a deal to lift the tariffs. Under one proposal, a specified volume from Mexico could enter the U.S. duty-free or at a reduced rate, and any imports above that level would be charged the full 50% tariff. 

But last week, U.S. Trade Representative Jamieson Greer told Mexico's auto and steel industries during a visit to the country that they should not expect the USMCA review to remove these tariffs on their sectors, as exclusively reported by Reuters.