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The United States and Mexico are negotiating a deal to reduce or eliminate President Donald Trump's 50% steel tariffs on imports up to a certain volume, industry and trade sources said on Tuesday.

An industry source familiar with the talks said that a likely outcome would include a quota arrangement, under which a specified volume from Mexico could enter duty free or at a reduced rate and any imports above that level would be charged the full 50% tariff.

It was unclear whether the deal would eliminate tariffs altogether for in-quota steel import volumes from Mexico or reduce them to a lower level, the source said. The specific volume level of the quota also was not yet determined.

Bloomberg News first reported the negotiations over tariff reductions for Mexican steel, quoting people familiar with the matter as saying that the two sides were close to a deal. The report said that terms of the agreement had not been finalized but would allow U.S. companies to import Mexican steel tariff-free as long as total shipments are kept below a level based on historical trade volumes.

A White House spokesperson declined comment, while a spokesperson for the Commerce Department which administers Trump's "Section 232" national security tariffs on steel and aluminum did not respond to a request for comment.

Mexico was the third largest source of U.S. steel imports in 2024 at 3.52 million net tons, down 16% from 4.18 million in 2024, according to U.S. Census Bureau data compiled by the American Iron and Steel Institute.

Canada was the largest foreign steel supplier at 6.56 million net tons in 2024, followed by Brazil at 4.5 million.

When Trump first imposed 25% steel tariffs in 2018, Mexico and Canada were granted exemptions with special procedures aimed at curbing any import surges beyond historical volumes. But these measures stopped short of a formal quota arrangement such as that for Brazil.

Trump canceled all steel and aluminum quotas, exemptions and exclusions in April to strengthen the metals tariffs, raising the effective rate.

A second trade source told Reuters that industry officials were pressing for a clearly defined steel quota arrangement for Mexico, given past import surges from Mexico. U.S. officials have long sought to curb the transshipment of steel products from third countries such as China via Mexico to the United States.

Mexican Economy Minister Marcelo Ebrard told reporters at a morning event that the government had argued to U.S. officials that the tariffs were unjustified, noting the United States runs a trade surplus with Mexico in steel and aluminum.

"Putting a tariff on a product where you have a surplus is quite debatable because the objective of the tariff is to reduce the deficit," he added.

Ebrard said countries like the UK had been exempted from similar measures and urged the U.S. to do the same with Mexico. He warned the tariffs would hurt jobs and supply chains in both countries due to their economic integration.

Source: Reuters

A federal appeals court allowed President Donald Trump's most sweeping tariffs to remain in effect on Tuesday while it reviews a lower court decision blocking them on grounds that Trump had exceeded his authority by imposing them.

The decision by the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. means Trump may continue to enforce, for now, his "Liberation Day" tariffs on imports from most U.S. trading partners, as well as a separate set of tariffs levied on Canada, China and Mexico.

The appeals court has yet to rule on whether the tariffs are permissible under an emergency economic powers act that Trump cited to justify them, but it allowed the tariffs to remain in place while the appeals play out.

The Federal Circuit said the litigation raised issues of "exceptional importance" warranting the court to take the rare step of having the 11-member court hear the appeal, rather than have it go before a three-judge panel first. It scheduled arguments for July 31.

The tariffs, used by Trump as negotiating leverage with U.S. trading partners, and their on-again, off-again nature have shocked markets and whipsawed companies of all sizes as they seek to manage supply chains, production, staffing and prices.

The ruling has no impact on other tariffs levied under more traditional legal authority, such as tariffs on steel and aluminum imports.

A three-judge panel of the U.S. Court of International Trade ruled on May 28 that the U.S. Constitution gave Congress, not the president, the power to levy taxes and tariffs, and that the president had exceeded his authority by invoking the International Emergency Economic Powers Act, a law intended to address "unusual and extraordinary" threats during national emergencies.

The Trump administration quickly appealed the ruling, and the Federal Circuit in Washington put the lower court decision on hold the next day while it considered whether to impose a longer-term pause.

The ruling came in a pair of lawsuits, one filed by the nonpartisan Liberty Justice Center on behalf of five small U.S. businesses that import goods from countries targeted by the duties and the other by 12 U.S. states.

Trump has claimed broad authority to set tariffs under IEEPA. The 1977 law has historically been used to impose sanctions on enemies of the U.S. or freeze their assets. Trump is the first U.S. president to use it to impose tariffs.

Trump has said that the tariffs imposed in February on Canada, China and Mexico were to fight illegal fentanyl trafficking at U.S. borders, denied by the three countries, and that the across-the-board tariffs on all U.S. trading partners imposed in April were a response to the U.S. trade deficit.

The states and small businesses had argued the tariffs were not a legal or appropriate way to address those matters, and the small businesses argued that the decades-long U.S. practice of buying more goods than it exports does not qualify as an emergency that would trigger IEEPA.

At least five other court cases have challenged the tariffs justified under the emergency economic powers act, including other small businesses and the state of California. One of those cases, in federal court in Washington, D.C., also resulted in an initial ruling against the tariffs, and no court has yet backed the unlimited emergency tariff authority Trump has claimed.

Source: Reuters

A federal appeals court allowed President Donald Trump's most sweeping tariffs to remain in effect on Tuesday while it reviews a lower court decision blocking them on grounds that Trump had exceeded his authority by imposing them.

The decision by the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. means Trump may continue to enforce, for now, his "Liberation Day" tariffs on imports from most U.S. trading partners, as well as a separate set of tariffs levied on Canada, China and Mexico.

The appeals court has yet to rule on whether the tariffs are permissible under an emergency economic powers act that Trump cited to justify them, but it allowed the tariffs to remain in place while the appeals play out.

The tariffs, used by Trump as negotiating leverage with U.S. trading partners, and their on-again, off-again nature have shocked markets and whipsawed companies of all sizes as they seek to manage supply chains, production, staffing and prices.

The ruling has no impact on other tariffs levied under more traditional legal authority, such as tariffs on steel and aluminum imports.

A three-judge panel of the U.S. Court of International Trade ruled on May 28 that the U.S. Constitution gave Congress, not the president, the power to levy taxes and tariffs, and that the president had exceeded his authority by invoking the International Emergency Economic Powers Act, a law intended to address "unusual and extraordinary" threats during national emergencies.

The Trump administration quickly appealed the ruling, and the Federal Circuit in Washington put the lower court decision on hold the next day while it considered whether to impose a longer-term pause.

The ruling came in a pair of lawsuits, one filed by the nonpartisan Liberty Justice Center on behalf of five small U.S. businesses that import goods from countries targeted by the duties and the other by 12 U.S. states.

Trump has claimed broad authority to set tariffs under IEEPA. The 1977 law has historically been used to impose sanctions on enemies of the U.S. or freeze their assets. Trump is the first U.S. president to use it to impose tariffs.

Trump has said that the tariffs imposed in February on Canada, China and Mexico were to fight illegal fentanyl trafficking at U.S. borders, denied by the three countries, and that the across-the-board tariffs on all U.S. trading partners imposed in April were a response to the U.S. trade deficit.

The states and small businesses had argued the tariffs were not a legal or appropriate way to address those matters, and the small businesses argued that the decades-long U.S. practice of buying more goods than it exports does not qualify as an emergency that would trigger IEEPA.

At least five other court cases have challenged the tariffs justified under the emergency economic powers act, including other small businesses and the state of California. One of those cases, in federal court in Washington, D.C., also resulted in an initial ruling against the tariffs, and no court has yet backed the unlimited emergency tariff authority Trump has claimed.

Source: Reuters

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Source: Reuters

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The US and Mexico are closing in on a deal that would remove President Donald Trump’s 50% tariffs on steel imports up to a certain volume, according to people familiar with the matter, a revamp of a similar deal between the trade partners during his first term.

Trump hasn’t been directly involved in the negotiations and would need to sign off on any deal. The talks are being led by Commerce Secretary Howard Lutnick, according to the people, who asked not to be identified as the discussions are private.

The people said the agreement hasn’t been finalized. Under its current terms, it would allow US buyers to import Mexican steel duty-free as long as they kept total shipments below a level based on historical trade volumes, according to the people. The new cap would be higher than what was allowed under a similar deal during Trump’s first term, they said, which was never a fixed figure but designed to “prevent surges.”

The White House didn’t immediately respond to a request for comment. Mexican President Claudia Sheinbaum’s office also didn’t respond to a request for comment.

At an event on Tuesday, Mexican Economy Minister Marcelo Ebrard said he told US officials in meetings last week that steel tariffs are not justified in Mexico’s case because the US sends more steel to Mexico than vice versa. Last Friday, he posted a picture that showed him shaking hands with a smiling Lutnick in Washington.

“We are waiting for their response, because on Friday we gave them the details of Mexico’s argument and we are right,” Ebrard told reporters Tuesday. “So we are going to wait for their response which will probably be this very week.”

Trump last week announced he would double steel duties to 50% after saying he would approve the purchase of United States Steel Corp. by Japan’s Nippon Steel Corp., a move he said would protect the domestic industry and national security. While domestic steelmakers welcome the move, end-users have urged the administration to ease the tariffs.

The negotiations come as Sheinbaum seeks an accommodation with Trump over immigration and drug trafficking across their shared border, which the US leader has demanded Mexico halt. Homeland Security Secretary Kristi Noem accused Sheinbaum Tuesday of “encouraging” more anti-deportation protests in Los Angeles, where the US has deployed troops. Sheinbaum has called Noem’s claim “absolutely false.”

The talks also come ahead of a Group of Seven leaders summit in Canada, where the two presidents are likely to meet.

US steel imports from Mexico totaled about 3.2 million metric tons last year, accounting for 12% of total shipments of the material according to Commerce Department data. A previous deal the US reached with Mexico in 2019, during Trump’s first term, agreed to prevent import volumes that exceeded average levels for the 2015-2017 period.

Source: Bloomberg Europe