Steelmaker Ternium pushes for stronger USMCA trade pact in face of tariffs
MEXICO CITY, June 18 (Reuters) - Ternium (TX.N), opens new tab, a steelmaker with a massive Mexico business, on Wednesday pushed for stronger terms of a regional trade agreement ahead of a pending review, despite current headwinds from steel tariffs imposed by the government of U.S. President Donald Trump.
Shipments from Mexico to the U.S. under the U.S.-Mexico-Canada (USMCA) trade agreement are currently exempt from tariffs, though steel products face a whopping 50% tariff.
The U.S. and Mexico are negotiating a deal to reduce or eliminate the steel tariffs on imports up to a certain volume, Reuters reported last week.
The USMCA deal is up for review next year, though some officials believe it may come sooner. In a presentation to analysts in New York on Wednesday, Ternium pushed for stronger "rules of origin" as part of the review to protect the region against what it called unfair trade.
Steelmakers have accused China of engaging in a practice known as dumping, in which they sell their product abroad below market value. Products can be shipped through another country before reaching their final destination, often making their origin unclear.
"While management acknowledges the adverse effects on the global economy, they view the U.S. (tariffs) as beneficial for long-term globalization," analysts at J.P. Morgan said in a note to clients.
The U.S. shipped 2.28 million metric tons more of steel to Mexico than Mexico shipped to the U.S. in 2024, Ternium said, though the U.S. government has previously accused Mexico of flooding its domestic market with steel.
Ternium is looking to boost its market share in Mexico's local market in the coming years, management said. In Brazil, it said Chinese imports continue to pressure the market.
Ternium could also acquire the remaining shares it does not currently hold in Brazil's Usiminas (USIM5.SA), opens new tab, the J.P. Morgan analysts said, though it is not a priority at the moment.
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