1. Negotiation Framework
The U.S. and Mexico are finalizing a deal to replace Trump’s 50% steel tariffs with a volume-based quota system, according to industry and trade sources. Key terms under discussion:
- Duty-free/quota-free access for Mexican steel imports up to a historical volume threshold;
- 50% tariff automatically triggered on shipments exceeding the quota;
- Exact quota size and tariff rate for in-quota volumes remain unresolved.
2. Market Context & Urgency
- Mexico’s 2024 exports to U.S.: 3.52M net tons (#3 supplier after Canada/Brazil);
- 16% drop from 2023 after Trump revoked all exemptions in April 2025;
- U.S. industry demands strict quotas to prevent import surges and Chinese transshipment.
3. Stakeholder Positions
- Mexico’s Economy Minister Marcelo Ebrard:“Tariffs on a product where the U.S. has a trade surplus are illogical. They jeopardize integrated supply chains.”
→ Cited UK’s exemption as precedent. - U.S. industry: Pushing for enforceable quotas to curb past volume spikes.
4. Historical Precedent
The deal mirrors Trump’s 2018 approach granting Canada/Mexico “surge monitoring” instead of formal quotas—a system scrapped in 2025 for blanket tariffs.
U.S., Mexico Near Deal to Replace Trump’s 50% Steel Tariffs with Quota System