THE EFFECTS OF US IMPORT TARIFFS ON STEEL AND ALUMINUM IMPORTS FROM MEXICO

Abstract

To this end, mathematical and statistical methods are used to model the effect of tariffs, ex-ante and ex-post, after implementing this trade policy, on exports of aluminum and steel from Mexico to the United States, versus US imports of these metals from the ROW. The results show that the protectionist tariff policy had a structural effect on US imports; likewise, the tariff shock implemented by the United States in June 2018 adversely affected its imports of these goods, both in terms of volume and value. This suggests that bilateral trade may be affected, but the effect is differentiated. The United States may be achieving its objective of protecting its domestic industry or it may impact upwards on the domestic prices of these metals, which could influence the prices paid by the final consumer. For Mexico, trade may be diverted or its export capacity reduced, adversely affecting its trade balance of these metals.