Mexico - May 2026

Mexico’s steel sector is set to receive a much-needed boost after President Claudia Sheinbaum pledged that her government would purchase steel produced nationally as part of her flagship Plan México, which is designed to strengthen domestic industry and supply chains.

In a landmark agreement, Sheinbaum announced that all federal work projects will use steel exclusively from Mexican companies, representing one of the first public efforts by the Mexican government to reduce the country’s dependence on its largest trading partner, the US – the destination of 80% of Mexican exports.

The move follows a failed attempt to reach a deal to lift ‌US steel tariffs, after the Trump administration imposed 50% tariffs on Mexican steel and aluminium last year. Mexican officials have repeatedly ‌complained that the move is unfair, not least because the US runs a trade surplus with Mexico in those sectors, even though more than half of Mexico’s steel exports are sent to its northern neighbour.

“It means that whatever the government buys in terms of steel will be Mexican steel or steel produced in Mexico,” explained Sheinbaum, hailing the agreement involving 19 government institutions and three business chambers – the national iron and steel chamber (Canacero), the national chamber of housing developers (Canadevi), and the national chamber of the construction industry (CMIC) – as “historic”. 

Sergio de la Maza Jiménez, president of Canacero, called the agreement “a decisive step” to support 90,000 jobs, providing certainty to investments, and strengthening competitiveness.

With Mexico also facing the review of the US-Mexico-Canada Agreement (USMCA), during a visit to Mexico in April US Trade Representative Jamieson Greer told Mexico’s auto and steel industries that they should not expect the USMCA review to remove tariffs on their sectors, according to Reuters. 

The steel plan consists of three pillars, in order to stimulate job creation, economic growth, and industrialisation. The first centres on public procurement, by coordinating working groups between institutions, business meetings between public buyers and steel firms, and incentives to promote the use of domestically produced steel. The second pillar focuses on industrial policy, by defending against unfair trade practices, promoting domestic suppliers, and applying an import substitution strategy. Finally, there will be incentives for infrastructure projects to use Mexican steel through competitive financing packages.

Sheinbaum said that the minister for anti-corruption and good governance, Raquel Buenrostro, will be the “guardian” of the agreement, to ensure that the commitment to buy only Mexican steel is kept.

Government officials framed the pact as a strategic move towards national autonomy, with Mexican steel underpinning nearly every major industrial supply chain. In 2026 alone, the government will need about 150,000 tonnes of reinforcing steel and 50,000 tonnes of structural steel for its infrastructure programme, which includes the construction of highways, bridges, schools, and sports centres, while during Sheinbaum’s presidency more than one million tonnes will be needed to produce passenger trains, according to officials.

Investment plan

Last year, Mexico updated its investment plan, which includes measures aimed at increasing domestic production, particularly steel output, in response to US tariffs, as well as requiring registration for imports of steel products.