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Mexico to implement system to avoid restart of US tariffs on steel and aluminum: government

Mexico City — Mexico will implement a system to monitor imports of steel and aluminum products in order to prevent Chinese-sourced products from ending up in the US and avert the US from considering the resumption of the tariffs on the Latin American country, the government said Monday.

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On May 17, US President Donald Trump announced the end of the tariffs of 25% and 10% on steel and aluminum, respectively, with Canada and Mexico.

At the 71st Ordinary General Assembly of Mexican steel-industry group Canacero, Subsecretary of Foreign Affairs Luz Maria de la Mora said that the initiative aims to work with representatives of Mexican industries affected by the measure since June 2018.

Furthermore, Mexican Economy Secretary Graciela Marquez Colin is considering the participation of authorities of the United States and Canada, to ensure an effective and efficient monitoring system to avoid the triangulation of products from other regions, such as China.

"Mexico is a strategic partner and a key partner of the US," De la Mora said.

The steel industry faced an economic loss estimated at $400 million due to payments of tariffs for 11 months, since US Section 232 tarrifs were applied on US steel imports, forcing Mexican companies to work at 68% of their installed capacity, according to Canacero.

Mexican steel exports to the US fell by 12% in the first quarter of 2019, while imports from China grew more than 20% in recent months, Canacero President Maximo Vedoya said.

"The excessive growth of trade activity could encourage the US to impose again tariffs to protect their national security," added Vedoya, stressing the importance of a trade-pact approval between Mexico, the US and Canada under the so-called US-Canada-Mexico Agreement, or USMCA, in order to make the Mexican steel industry more competitive.

(Correcting the name of the Mexican secretary of economy to Graciela Marquez Colin in story published May 27)

-- Claudia Cardenas, claudia.cardenas@spglobal.com

-- Edited by Derek Sands, newsdesk@spglobal.com