Mexico nears lower US aluminum and steel tariff deal finalisation as effective rates could fall to 5%

Mexico is approaching the final stages of negotiations with the United States on reducing tariffs on aluminum and steel products, with officials indicating that a deal could significantly lower the effective tariff burden on Mexican exporters.

Luis Rosendo Gutiérrez, Mexico’s undersecretary of foreign trade, said talks had made progress during the National Auto Parts Industry congress. Discussions covering the automotive sector are targeting a 15% tariff, which could fall to an effective rate of around 4% to 5% after deductions linked to regional value content.

The potential reduction would bring Mexico closer to tariff levels faced by competitors including Japan, South Korea and Germany, improving the position of Mexican suppliers in the US market.

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Mexico has made reductions in US tariffs on aluminum, steel and automobiles a priority in its trade discussions with Washington. Officials are also seeking to maintain stable conditions for cross-border manufacturing supply chains.

According to officials, auto parts tariffs would not face further increases, while rules of origin would remain unchanged. The position provides greater certainty for manufacturers operating across the North American supply chain.

The tariff discussions come after the US restored a 25% Section 232 tariff on aluminum imports from Mexico in March 2025 and raised it to 50% in June 2025. Mexico has since continued to seek tariff relief through its broader trade negotiations with the US.

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The latest progress comes as formal Mexico-US trade talks have been pushed into October. While the fourth round of negotiations was delayed because of scheduling commitments, technical discussions between Mexican officials and the US Trade Representative’s Office have continued on a daily basis, according to Gutiérrez.

The negotiations are aimed at reaching an interim bilateral agreement covering tariffs and other trade issues. Aluminum and steel remain among Mexico’s key priorities as the two countries work to strengthen their cross-border manufacturing links.