US tariffs cast shadow over Nuevo Leon’s steel industry in Mexico

For nearly the whole year, only one of the five machines at a metal products workshop in Apodaca, Nuevo Leon, in northern Mexico, has been operational. The small business was forced to drastically reduce its production capacity after United States President Donald Trump imposed tariffs on steel and aluminium.

“It affected us greatly,” Jose David Garcia Torres, chief of operations at Maquinados Bera, told Al Jazeera. “Many companies decided to halt production, and our services were no longer needed. We were stopped for months, literally doing nothing.”
The US initially implemented 25 percent tariffs on steel imports in March and doubled that to 50 percent in June. In the first seven months of the year, the latest data available, Mexican steel and aluminium exports to the US fell 29 percent and 21 percent, in value, respectively, according to data from the US Department of Commerce.

Tariff negotiations are continuing after Mexican President Claudia Sheinbaum and Trump spoke by phone on October 25. A 90-day extension of tariff pause on most items other than steel, copper and aluminium, expected to expire on October 31, was extended for “a few more weeks”, Sheinbaum said.

Belem Iliana Vasquez Galan, an economics professor at Colegio de la Frontera, a research institute in Monterrey, told Al Jazeera that these recent tariffs have a broad reach, encompassing all products containing steel and aluminium.

“It’s not just the steel industry but also the automotive industry, the production of electronic goods, machinery, everything that includes some steel, aluminium or copper,” she said.
Nuevo Leon’s governor, Samuel Garcia, declared at a September trade show that the state’s steel and aluminium industry has been affected by tariffs applied under Section 232 of the Trade Expansion Act of 1962, which allows the US president to impose tariffs for national security interests. At the event, Garcia pledged support for major companies like Nemak and Ternium, which Al Jazeera couldn’t reach for comment.

In recent years, Nuevo Leon, known as Mexico’s industrial powerhouse, has grandly announced significant foreign investments, rebranding itself as a leading city in nearshoring. This was largely driven by the announcement of the construction of a Tesla Gigafactory in March 2023. This project, which brought immense pride to the region and the country, is now widely considered cancelled after Tesla CEO Elon Musk put it on hold in July 2024 due to uncertainty over trade policies between Mexico and the US and in the lead-up to the US elections that year. The Mexican government insists it is merely on hold.