Mexico

It has been an uncertain and slower start to the year, to put it mildly. Uncertainty around the US-Mexico trade relationship has translated into lower industrial activity and thus less scrap available as well as reduced scrap demand. The export market has provided support for grades that typically would remain in Mexico such as cast aluminium and aluminium extrusions. Most UBC volumes seem to be going to the export market too.

New US President Donald Trump has threatened to impose 25% tariffs on Mexican imports as soon as February 1; if this were to become reality, it would clearly be catastrophic for Mexico as the USA is the destination for more than 80% of its exports. However, the measure would also be highly damaging for US industry and the American economy as most of Mexico’s exports are components and equipment to be integrated into US manufacturing processes.

President Trump has made the same tariff threat to Canada, another economy highly integrated into the North American market, and so the uncertainty is hitting not only Mexico but also activities across the North American region.

Uncertainty and chaos create fertile ground for well-intentioned but misguided policies, such as restricting the free trade of recyclable materials which is essential for our industry. The North American region is an industrial powerhouse that relies on our materials and on recyclable materials that are yet to undergo recycling processes locally. It is essential that we do our best to inform industry associations and governments of the destructive effects of trade restrictions on recyclable materials.