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US Tariffs Crippling Mexican Steel and Aluminum Exports, Hurting Small Businesses
Monterrey, Mexico – US tariffs on Mexican steel and aluminum imports are taking a heavy toll on small businesses in northern Mexico, forcing production cuts and layoffs, according to business owners and economists.
The tariffs, initially implemented earlier this year and later doubled, have led to a significant drop in Mexican exports to the US. Data from the US Department of Commerce shows a 29% decrease in the value of steel exports and a 21% drop in aluminum exports in the first seven months of the year.
Jose David Garcia Torres, chief of operations at Maquinados Bera, a metal products workshop in Apodaca, Nuevo Leon, told Al Jazeera that his business was severely impacted, with only one of five machines operational for most of the year. “Many companies decided to halt production, and our services were no longer needed,” he said.
The tariffs, imposed under Section 232 of the Trade Expansion Act, which allows the US president to impose tariffs for national security interests, have affected not only the steel industry but also related sectors like automotive, electronics, and machinery, according to Belem Iliana Vasquez Galan, an economics professor at Colegio de la Frontera.
The tariffs uncertainty also reportedly prompted Tesla CEO Elon Musk to put the breaks on the construction of a planned Tesla Gigafactory in Nuevo Leon. The Mexican government insists the project is merely on hold.
While Nuevo Leon’s deputy economy secretary, Emmanuel Loo, downplayed the impact, touting the situation as an opportunity to strengthen local supply chains, small business owners paint a different picture. Jorge Rodriguez, who runs a metalworks workshop, confirmed a slowdown in orders, particularly following the tariff announcements. He said, “Purchase orders have decreased significantly…Their [exports] almost completely stopped, and I no longer manufacture anything for them.”
To survive, many small businesses have had to diversify, accepting smaller, local orders and producing goods they previously hadn’t, just to keep their operations afloat and workers employed.
As the United States-Mexico-Canada Agreement (USMCA) comes up for review next year, the Nuevo Leon government says it is working with US officials to ensure Mexican steel and aluminum receive equal treatment under USMCA rules of origin, aiming for “virtually tariff-free” exports to the US.
In an attempt to mitigate the impact, Mexico has also implemented temporary tariffs on steel imports from countries without free trade agreements, like China, a move seen by some as an attempt to appease the US.
Despite the challenges, some business owners are cautiously optimistic, seeing signs of returning production rhythms. Rodriguez said, “They [the companies] are telling me that things are improving, but I’m not getting excited any more until I see the purchase order.”
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