Mexico’s Ministry of Economy extended countervailing duties of US$4.14–5.40 per net kilogram on Chinese stainless steel sink imports for five more years, reinforcing trade defenses as the OECD projects global steel overcapacity to reach 745Mt by 2028 and Chinese exports hit a record 131Mt. The measure matters as Mexico’s crude steel output fell nearly 6% in 2025, consumption dropped to 25Mt, and US tariffs raised construction project costs 3–6%, pressuring steelmakers, builders, and supply chains. Alongside higher tariffs on non-FTA steel imports and Plan México procurement preferences, the decision signals tighter trade enforcement ahead of the USMCA review.
Mexico’s Ministry of Economy will keep countervailing duties on imports of stainless steel sinks from China in place for five more years, a decision that lands as the OECD warns of record Chinese steel exports and as Mexican builders report that US tariffs have raised project costs by as much as 6%.
The ministry published the final resolution of its sunset review in the Official Gazette of the Federation, extending the definitive duties for five years from May 9, 2025. The measures range from US$4.14 to US$5.40 per net kilogram on products originating in China.
After weighing arguments and evidence submitted by domestic producers, along with information gathered by the ministry itself, authorities concluded there were sufficient grounds to determine that removing the measures would lead to a recurrence of dumping and injury to the domestic industry. “This resolution provides an adequate defense for the domestic industry against imports carried out under conditions of unfair international trade practices,” the ministry said.
The duties were first imposed in May 2015 following an investigation by Mexico’s trade authority and were renewed for an additional five-year period once the original term expired. This marks the second extension of the measures, which apply a levy designed to offset prices of goods entering the market under unfair competitive conditions and to protect local manufacturers.
OECD Flags Record Chinese Exports
The decision comes against a deteriorating global backdrop. The OECD’s Steel Outlook 2026 report projects that excess global steelmaking capacity will rise from 640Mt in 2025 to 745Mt by 2028, while demand growth remains weak. Countries with surplus capacity are increasingly shipping excess steel abroad, distorting competition and depressing prices, the organization said.
China remains at the center of the trend. Chinese steelmakers exported a record 131Mt in 2025, equivalent to about 14% of the country’s crude steel output and 153% more than in 2020. The report states that “Chinese steel exports have soared to record levels” and links the surge to weak domestic demand that has pushed producers toward external markets.
Government support is a particular concern. According to the report, “medium-sized Chinese steel firms received 15 times more in subsidies, relative to their asset size, than the median producer elsewhere,” while Chinese steel subsidy levels have nearly doubled since 2019.
The OECD also documented growing circumvention of trade defenses. It found 88 cases in which Chinese exports of products subject to trade measures rose toward ASEAN countries, followed by increased exports of the same products from ASEAN economies to OECD markets. It further identified a “300% increase in semi-finished steel exports from China to Southeast Asia,” suggesting third-country processing is being used to sidestep restrictions.
Brazil, Canada, India, Mexico and the United States all raised tariffs on various basic steel products in 2025, yet the organization cautions that trade diversion is eroding the effectiveness of such measures. As the report notes, “trade tools applied by importing countries are enforcement responses to dumping and subsidization, but they treat the consequences rather than the causes.”
Mexican Market Contracts
Mexico is already absorbing the impact. Crude steel production fell almost 6% in 2025, while domestic steel demand “declined drastically,” dropping about 4.6% amid a wave of low-priced Asian imports and slower industrial activity. Steel demand across the USMCA region is expected to grow only 0.6% in 2026.
World Steel Association data on apparent use of finished steel products show Mexico fell two places in the global ranking in 2025, from eighth to tenth, as consumption declined to 25Mt, a drop of roughly 10%, among the steepest of the major consuming countries. Germany moved ahead with 29.2Mt and Brazil returned to the top 10 with 26.8Mt. Global apparent steel use fell 1.9%, with China the largest consumer at 796Mt, followed by India at 159.8Mt and the United States at 90.9Mt.
US trade measures are compounding the squeeze. Luis Méndez, President, Mexican Chamber of the Construction Industry (CMIC), said project costs in Mexico have risen between 3% and 6% on average due to US steel tariffs. Mexico consumes about 28Mt of steel a year, 60% of it in construction, but produces only 19 to 20Mt, leaving a deficit of around 8Mt.
In response, Congress approved reforms in late 2025 to raise tariffs on steel imports from countries without trade agreements with Mexico, and the federal government formalized an accord with the steel and construction industries to prioritize locally produced steel in public procurement under Plan México. The agreement, signed with the government of President Claudia Sheinbaum, involves the Ministry of Good Government on contract transparency, the Ministry of Economy on identifying steel-consuming companies and production incentives, and the Finance Ministry on financing schemes; working groups have already begun.
Public works are expected to anchor demand: building 3,000km of rail lines will require 1.5Mt of steel, plus 150,000t of reinforcing steel and 50,000t of structural steel, with passenger train projects consuming a total of 1Mt over the six-year term. Construction accounts for 6.8% of GDP, employs 5 million people and represents 60% of total productive investment.
With overcapacity projected to keep rising through 2028 and China planning additional steelmaking capacity, the OECD sees little sign the pressures will ease soon, setting up steel as a central issue in the upcoming USMCA review, where Mexican officials argue the region should compete jointly against subsidized Asian exports rather than raise barriers within the bloc.
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