Ferromex customers halt steel exports to the US until further notice
Ferromex, a private rail consortium that operates the largest railway in Mexico, revealed that its customers in the steel-making business have suspended exports to the United States since the Trump administration slapped tariffs on their products.
Steelmakers suspended shipments while they are waiting for U.S. buyers to decide if they will pay the rates, said the Grupo Mexico subsidiary, which controls a combined mileage of 7,500 miles that connects to the U.S. market through five cross border points.
The U.S. government decided not to extend an exemption to tariffs of 25 percent on steel and 10 percent on aluminum imported from the European Union, Canada, and Mexico.
Ferromex, which ships 15,000 railcars of steel products every year, is not sure how long the suspension will last.
“It is likely that some agreements or contracts that we have with the steelmakers will change,” explained a Ferromex spokeswoman to Mexican media outlets. “It is very likely that this will affect us, but we hope not too much.”
The Mexican government plans to take retaliatory action with tariffs to U.S. products such as flat steel (hot and cold sheets, including coated and various tubes), as well as several agricultural products.
According to Reuters, a 20 percent tariff is in the works for U.S. pork legs and shoulders, which account for about 90 percent of the country’s US$ 1.07 billion annual imports of the cuts.
Mexican authorities also announced they will start a dispute settlement process at the World Trade Organization over the tariffs on steel and aluminum, the economy ministry said in a statement, joining the European Union in seeking WTO involvement against the new measures.