International trade frictions arose again as Mexico planned to impose tariffs on imported aluminum semis

On the evening of April 22, the Mexican Ministry of Economy published a federal official gazette entitled "Decree to Amend Import and Export Tariffs”, proposing to impose temporary tariffs of 5% to 50% on imports of goods belonging to 544 tariff levels, involving steel, aluminum, textiles, clothing, footwear, wood, plastics and their products, as well as manufactured goods, chemical products, paper and paperboard, ceramic products, glass and its products, electrical equipment, transportation equipment, musical instruments, furniture, etc. The decree was published in the Federal Official Gazette on April 22, 2024 and was expected to enter into force on April 23. Its validity period is two years from the date of entry into force.

According to SMM data, China's exports of aluminum semis to Mexico totalled about 509,000 mt in 2023, accounting for 9.6% of the total. In the first quarter of 2024, the total amount of domestic aluminum semis exports to Mexico was about 159,000 mt, accounting for 11.2% of the total. The domestic aluminum semis exported to Mexico were mainly aluminum plats/sheets and strips, with an average monthly export volume of about 35,000 to 40,000 mt, accounting for about 15% of China’s aluminum plates/sheets and strip exports.

As one of the important export destinations of aluminum semis, additional tariffs imposed by Mexico are bound to have an impact on China's aluminum semis exports. However, companies are experienced in coping with aluminum semis overseas trade frictions in recent years. In addition, the concentration of China's aluminum semis export destinations is relatively low. Therefore, SMM expects that the actual impact on the market will be relatively limited.