Mexico Takes Aim at Vietnamese Steel Imports, Escalating Trade Tensions

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By Metal Miner – Jan 03, 2024, 4:00 PM CST

• Vietnamese exporters of cold-rolled steel sheets now face new tariffs, although they can exempt themselves by proving non-Chinese steel sourcing.
• The U.S. has also raised concerns over the origin transparency of steel and aluminum imports from Mexico.
• Latin American steel production has declined due to low-cost imports and fluctuating global steel prices, affecting the region’s self-sufficiency in steel production.

Via Metal Miner

Neither China nor rising global steel player Vietnam had a very good 2023 due to fluctuating steel prices and demand. Like some other steel-producing countries, both have primarily resorted to flooding foreign markets with cheap steel products to remain in the black. This has led to massive protests from countries where these imports land, including India.

Some importing nations have already imposed steep tariffs on such imports to protect their domestic players. Recently joining this growing list is Mexico. Indeed, 2024 may have started off on the wrong note for Vietnam, as this Mexico recently imposed a massive entry tariff of up to 80% on imports of certain steel products.

The decision came after domestic manufacturers like Ternium protested about unfair competition. The Mexican government then launched a major investigation to help them understand whether imports from Asian countries were a indeed serving as a major deterrent for local steel makers.

Hoa Phat and Posco Vietnam Can Still Avoid Tariffs

As a result, certain Vietnamese exports of cold-rolled steel sheets are now subject to the new tariffs. However, exporters can exempt themselves if they can demonstrate that they source their steel from countries other than China. This was made official in a statement by the economy ministry in Mexico’s official gazette. Hoa Phat, Vietnam’s largest steel manufacturer, now has a tariff of nearly 12%, whereas Posco Vietnam faces a 26% tariff. That said, the exemption for proving the country of origin is also available to these companies.

The U.S., too, continues to raise issues regarding the import of steel and aluminum goods from Mexico, citing concerns about the transparency of the products’ actual origins. Meanwhile, other global players wonder how all of these new developments will impact steel prices.

Why Vietnam?

Many steelmakers accuse China of dumping or selling off its excess steel in the Mexican market at prices that some report as being lower than production costs. Now it seems that certain Vietnamese companies are little more than a proxy for these Chinese firms. When the accusations of this “proxy trade” grew shriller, the Mexican government ordered an investigation. Soon after, they determined that any imports from Hoa Phat and Posco Vietnam,

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