The US and Mexico reached a bilateral agreement this week to strictly monitor certain steel exports from Mexico to the US to ensure they do not contain low-cost steel from countries outside North America. The agreement, which aims to avert future US tariffs, was announced by the US Trade Representative's (USTR) office on Thursday.
The agreement affects primarily the alleged transshipment of grain-oriented electrical steel (GOES) from outside North America into the United States through downstream products such as transformer cores that could contain such steel.
Starting in Q4 2020, Mexico will start to implement a "strict monitoring regime for exports of electrical transformer laminations and cores made of non-North American GOES," USTR said. As a result of the agreement, imports of electrical transformers and related parts from Mexico will not be subject to tariffs.