Mexico's steel industry is facing a serious crisis due to a record increase in highly subsidized Chinese steel exports and an alarming global overcapacity, which the Organization for Economic Co-operation and Development (OECD) projects will reach 745 million tons by 2028. 

This flood of material has caused the Mexican steel production and consumption to fall drastically by 6% and 10%, respectively, relegating Mexico to tenth place in global steel consumption.

To circumvent US trade defenses, Chinese exporters are resorting to triangulation and circumvention, increasing shipments of semi-finished steel to Southeast Asia by 300% for minimal processing before re-export. Given this, traditional anti-dumping measures are insufficient to solve a problem that the OECD describes as structural and stemming from distortive government subsidies.

As a defensive response, the Mexican Congress raised tariffs on nations without trade agreements and promoted the Mexico Plan to prioritize locally produced steel in public works projects. 

Mexican authorities maintain that, in anticipation of the upcoming review of the United States-Mexico-Canada Agreement (USMCA), North America must eliminate internal barriers and unify its strategy to compete as a bloc against the steel threat from Asia.