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Trump’s election was seen as an opportunity to boost the North American supply chain by steel manufacturer Ternium’s chief executive officer, Maximo Vedoya, in the company’s quarterly earnings call on Wednesday November 6.
“North America is a very competitive region to produce steel, mainly low-carbon intensity steel,” Vedoya said.
According to the Ternium CEO, Mexico’s president Claudia Sheinbaum, who started her administration in October, shared Trump’s concerns regarding the Chinese market and unfair trade.
“She’s been very clear and very vocal about this,” the executive said.
With a second Trump administration, there is a general market expectation that barriers between the US and China will likely intensify.
Latin American market participants told Fastmarkets at the Alacero Summit 2024 on October 30 that they anticipate the gulf between the US and China to deepen if additional tariffs are implemented, pushing even more excess steel and other materials into other markets — namely Latin America.On a panel in the event, Geraldo Esquivel, the economist editor of Estudios Economicos at El Colegio de Mexico, said that is possible that Mexico starts adopting policies similar to the United States with respect to China, following the results of the US elections.
The Ternium executive highlighted that it is “impossible to compete” with Chinese subsidies and that the country’s overcapacity was generated not by market conditions, but by the Chinese government’s “industrial policies.”
Although it is still early to know the role tariffs will play in the US, Vedoya said that the future administration in the US has already shown “a clear view” against the dependence of China.
“There will be discussions and negotiations [between US and Mexico],” Vedoya said, adding that both governments are aligned on wanting to curb excess capacity and unfair trade.
Ternium’s CEO said on the earnings call on Wednesday that in a recent meeting of industry representatives with the new Mexican president, a good outcome of the United States-Mexico-Canada Agreement [USMCA] was felt, despite room for improvement.
“There was a big consensus that there is an opportunity to strengthen the North American region and to save against violation, especially by Asia,” he said.
At the same time, Gerdau’s CEO Gustavo Werneck, expressed optimism about a possible demand increase in the US steel market under Trump’s new term.
“This is positive for the company,” Werneck noted during a third-quarter earnings call on November 6. “Gerdau was actually well-positioned for any election scenario in the United States.”
Werneck pointed out that Gerdau’s position is somewhat unique among Brazilian companies, as it operates production within the US rather than relying on exports from Brazil. This setup, he explained, gives the company a more favorable stance amid potential trade adjustments.
Rafael Japur, Gerdau’s chief financial officer, added that Trump’s protectionist stance could benefit US steel producers while a stronger dollar, driven by protectionist policies, might limit imported products in Brazil.
“Structurally, for us, a stronger dollar is beneficial. In Brazil, imports become more expensive and harder to bring in.” Japur said, also noting that the stronger exchange rate tends to favor Brazilian export prices. “Additionally, we have a more positive exposure with a stronger dollar.”
Despite these advantages, Werneck also warned that Trump’s presidency could increase pressure on Brazil to strengthen trade defenses against Chinese steel imports.
“With the expected US trade protections under Trump’s second term, steel that was directed to the US may be diverted to other destinations, including Brazil,” he explained. “China has continued sending steel to Brazil even with a 25% surcharge, and I do not see this stopping.”
The counterpoint is that if protectionist measures are reinforced, as Trump has promised, demand for products exported to the US through other countries could shift to Brazil, as seen with the US’s recent Melt and Pour Policy
In July, the US government imposed a 25% tariff under Section 232 on steel and aluminum products shipped from Mexico that are melted and poured outside of North America. The notable exception of Brazil from this measure could position the country as a prime supplier to the US market for products such as steel slab, where Brazil is a leading producer and exporter.
US steel market participants are also closely tracking the impact on trade between the US and Mexico following the elections.
“I think the election outcome will be good for the steel market. I’m interested to see what comes out of any new trade discussions and negotiations with Mexico,” a distributor told Fastmarkets.
The US steel industry has been vocal in urging Congress to curb unfair trade practices by China.On September 11, a group of US steel industry participants sent a letter to the US Senate to pass the Leveling the Playing Field 2.0 Act — which aims to address the “evolving threat China poses to domestic production,” according to the letter.
Members of Congress have supported the need to tackle trade practices hurting the steel industry.Enforcing trade policies and the USMCA are also key focus points for US steelmakers.
In Nucor’s earnings call on October 24, the company pledged to prioritize working with either administration on strengthening trade enforcement and repairing the trading relationship between the US and China, Topalian said.
“The USMCA is a great treaty that we all enjoy. In that agreement, there are provisions to…engage the International Trade Commission for antidumping and countervailing duties cases, the [volume of imports coming in] are staggering,” Mark Millett, chief executive officer of Steel Dynamics Inc, said on October 17.
The USMCA is up for review on July 1, 2026.
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