The United States and Mexico are nearing an agreement to remove the 50% steel tariffs imposed by former President Donald Trump. The deal would allow Mexican steel imports to enter the US without tariffs, as long as shipments stay below a set limit based on past trade volumes.
The talks are led by US Commerce Secretary Howard Lutnick, though Trump has not been directly involved. Any deal would still require his approval.
Sources say the new import cap would be higher than the one in a similar agreement made during Trump’s first term, which aimed to prevent sudden import surges.
Neither the White House nor Mexican President Claudia Sheinbaum’s office has commented on the negotiations.
Following news of the potential deal, US steel stocks fell. Cleveland-Cliffs Inc. dropped over 7%, and Nucor Corp. lost more than 4%. The Mexican peso also eased some losses.
Mexican Economy Minister Marcelo Ebrard said last week that steel tariffs on Mexico are unjustified because the US exports more steel to Mexico than it imports from there. He shared a photo of himself shaking hands with Lutnick and said Mexico is waiting for a response this week.
Last week, Trump announced he would raise steel tariffs to 50%, citing national security and support for domestic steelmakers. While US steel producers support the higher tariffs, many industries that use steel want the tariffs reduced.
The negotiations also occur amid tensions over immigration and drug trafficking at the US-Mexico border. Mexican President Sheinbaum is seeking cooperation with Trump, who has demanded Mexico take stronger action. Homeland Security Secretary Kristi Noem accused Sheinbaum of encouraging anti-deportation protests, a claim Sheinbaum denied.
The talks come ahead of a Group of Seven summit in Canada, where Trump and Sheinbaum may meet.
In 2024, the US imported about 3.2 million metric tons of steel from Mexico, making up 12% of total US steel imports. The previous 2019 deal set limits based on average imports from 2015 to 2017.
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