'Meeting on Steel Industry Measures Regarding Mexico Tariff Increase' Held
As Mexico raises import tariffs on 392 items including steel to a maximum of 25%, the government has decided to assess the impact on related companies and the export of steel products, which are one of our major export items, and to strive to minimize damage.
On the 22nd, the Ministry of Trade, Industry and Energy held a 'Steel Industry Countermeasure Meeting on Mexico's Tariff Increase' at the Korea Iron & Steel Association, chaired by Yang Ki-wook, Director of Industrial Supply Chain Policy. The meeting was attended by the Korea Iron & Steel Association, the Korea Trade-Investment Promotion Agency, and seven steel companies including POSCO, Hyundai Steel, Dongkuk CM, SeAH Steel, and KG Steel to discuss countermeasures against Mexico's tariff increase.
On the 16th (local time), Mexico's Ministry of Economy published an amendment to the tariff imposition rules in the official gazette, temporarily raising import tariffs on 392 items including steel until July 31, 2025. Among these items, 92 correspond to the top 500 export items to Mexico in 2022 (based on HS 6-digit level), of which 74 are steel products. According to this measure, steel tariffs will increase from the current level of 10% to a maximum of 25%.
According to the Korea Iron & Steel Association, steel exports from South Korea (26 million tons in 2022) to Mexico (2 million tons) account for 7.8%. In terms of value, it is about $2.7 billion out of approximately $32.9 billion, or 8.3%.
The industry views the long-term impact of this tariff increase as inevitable. The Korea Iron & Steel Association, which attended the meeting, stated, "85% of steel export volumes to Mexico receive tariff exemptions through Mexico's industrial promotion policy (PROSEC), so the short-term impact will be limited, but the impact on the remaining volumes is unavoidable," adding, "In the long term, preparation for the uncertainty of PROSEC continuation also seems necessary." PROSEC is a policy that applies low preferential tariffs (0-7%) on equipment, parts, and materials used in the production processes of specific industries.
Director Yang said at the meeting, "The trade environment surrounding the steel industry is rapidly changing, including the introduction of the European Union's Carbon Border Adjustment Mechanism (CBAM), and Mexico's recent measure is part of this trend," adding, "The public and private sectors must respond together by strengthening the competitiveness of our steel industry and diversifying export destinations, and the Ministry of Trade, Industry and Energy will minimize damage to our companies through intergovernmental trade responses."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
