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Investing.com -- Shares of major U.S. steel producers declined on Wednesday as reports emerged that the U.S. and Mexico are nearing a deal that would ease President Donald Trump’s 50% tariffs on Mexican steel imports.
Cleveland-Cliffs (NYSE:CLF) stock fell 6.5%, Nucor (NYSE:NUE) dropped 4%, and U.S. Steel (NYSE:X) declined 0.2% following news that the potential agreement would allow duty-free imports of Mexican steel up to a certain volume threshold.
According to Bloomberg, citing people familiar with the matter, the proposed deal would establish a cap on Mexican steel imports based on historical trade volumes, above which the 50% tariffs would apply. The sources indicated that the new cap would be higher than what was permitted under a similar arrangement during Trump’s first administration.
Commerce Secretary Howard Lutnick is reportedly leading the negotiations, though President Trump has not been directly involved and would need to approve any final agreement. The discussions remain ongoing and no deal has been finalized.
The potential easing of steel import restrictions could increase competition for domestic producers, who have benefited from protectionist trade policies. The original tariffs were implemented to protect U.S. steel manufacturers from foreign competition.
The previous agreement between the U.S. and Mexico during Trump’s first term did not establish a fixed import limit but was designed to "prevent surges" in Mexican steel entering the American market.
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