On November 5, 2020, the United States and Mexico announced that they had concluded consultations pursuant to their Joint Statement of May 17, 2019 to address the transshipment of grain-oriented electrical steel (GOES) from outside North America into the United States through GOES-containing downstream products. The May 2019 Statement committed Mexico (and Canada) to implement measures (1) to prevent the importation of certain steel and aluminum products into the United States that are unfairly subsidized or sold at dumped prices and (2) to prevent the transshipment into the United States of aluminum and steel made outside of Canada, Mexico or the United States. Mexico has now established a strict monitoring regime for exports of electrical transformer laminations and cores made of non-North American GOES. According to the Office of the U.S. Trade Representative (USTR), Mexico will begin monitoring in the fourth quarter of 2020 shipments of these products to the United States. Further, the United States and Mexico will consult at regular intervals on the implementation of these agreed measures and on the state of bilateral trade and market conditions relating to GOES products.

As a result of Mexico’s commitment to such monitoring, Ambassador Robert Lighthizer stated that imports from Mexico will not be subject to any action to adjust imports of electrical transformers and related parts arising from the U.S. government’s ongoing national security Section 232 investigation into imports related to electrical transformers for the bulk-power system grid. Ambassador Lighthizer thanked Mexico for its commitment to monitor these imports, stating: “The resilience of North America’s energy infrastructure is significantly enhanced by having electrical steel production capability within our region.  An influx of low-price steel from third countries imperils this capability.”

For additional background information, please see updates of May 20, 2019 and May 19, 2020.