Unfair trade practices and their effects on the Mexican steel industry

Up until August 2023, twenty-nine steel producers in Mexico have requested the Economic
Secretary to investigate unfair trade practices in steel imports. This study explores the impact
of these practices on the Mexican steel industry. We analyzed reports of investigations of unfair
trade practices published by the National Chamber of the Steel and Iron Industry and conducted
interviews with steel producers. Through exploratory data analysis and qualitative open coding
of content, we found that the importation of steel under unfair trade practices caused a reduction
in internal sales ranging from -9% to -23%. Additionally, these practices decreased the operative
margin between -6.9% and 57% of the national steel producers, depending on the steel product.
On the other hand, the steel industry is highly capital-intensive, and the effects of these practices
lead to the generation of idle capacity. The Economic Secretary has applied compensatory duties
to counteract the damage and protect the national steel industry. Nevertheless, the effects on
industries that use steel as an intermediate good are being questioned. It is necessary to consider
alternative solutions that do not rely solely on implementing protectionist measures.