Why This is Important to Wisconsin: Wisconsin companies may be able to provide technology and capital equipment to the steel industry in Mexico.
Mexico has a long history in the steel industry, dating back to 1900 when an iron and steel foundry was established in Monterrey.
Steel continues to be a crucial component of the country’s industrial sector. According to CANACERO, the organization representing the steel industry, the iron and steel sector contributed nearly $5.6 billion to the country’s economy in 2022 with annual production of about 22 million tons through an electric arc furnace production process.
According to a Research and Markets report, Mexico is the second-largest steel producer in Latin America and counts among the top 15 steel-producing nations worldwide.
A report by Mexico News Daily said that in spite of concerns over a 25% tariff imposed by the U.S., Mexico’s steel industry has confirmed its commitment to President Claudia Sheinbaum’s Plan México, saying it will invest $8.7 billion over the next five years to increase domestic production. Plan México—also known as the National Strategy for Industrialization and Shared Prosperity—is Sheinbaum’s economic development project aimed at strengthening the country’s role in global value chains.
Members of CANACERO said they are willing to absorb the tariffs on steel imports to the U.S. in exchange for a crackdown on Asian imports by the Mexican government. CANACERO claims a significant amount of steel is imported to Mexico from Vietnam and Malaysia, with the U.S. market as the ultimate destination, Mexico News Daily reported.
CANACERO President Víctor Martínez Cairo said negotiations are underway to resolve the U.S. tariffs, and he believes there are opportunities to create synergies between the U.S. and Mexico involving steel production.
Mexico uses about 33 million tons of steel each year. CANACERO said its five-year investment plan hopes to end Mexico’s reliance on heavily subsidized steel from China and instead handle all of the country’s domestic steel needs through production in Mexico supplemented by U.S. imports.
Mexico exports about 3.5 million tons of steel to the U.S. annually and imports 4.9 million tons from the U.S.
Wisconsin companies in the steel industry may find opportunities in Mexico.
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