AISI, Aluminum Association cite USMCA triangular trading concerns

In testimony before a U.S. Office of the Trade Representative (USTR) committee, the presidents of two metals industry trade associations said a clampdown on metal exported into Mexico or Canada and then transshipped into the U.S. must be included in a renegotiated United States-Mexico-Canada (USMCA) trade pact.

“Mexico must immediately implement an aluminum import monitoring (AIM) system," a news release from the Arlington, Virginia-based Aluminum Association says.

“After committing to establish an AIM system in 2019, Mexico still has not done so. The U.S. and Canada have already stood up systems to track country of smelt and country of most recent cast and Mexico’s commitment must be fulfilled before any new aluminum trade discussions proceed.”

Both U.S.-made steel and aluminum contain, on average, more recycled content than most imported products, making the policy debate of interest to metals recyclers in the U.S.

“A renewed but strengthened USMCA must deliver on its original promise: a level playing field for North American manufacturers and workers,” Aluminum Association President and CEO Charles Johnson said in his testimony. “With strong monitoring, harmonized tariffs and fair rules of origin, we can ensure that the benefits of USMCA flow to the U.S., Canada and Mexico—not to subsidized producers in China.”

Also testifying was Kevin M. Dempsey, president and CEO of the Washington-based American Iron and Steel Institute (AISI). Like Johnson, he criticized transshipments or triangular trading but also included Canada as a culprit.

“The benefits of the USMCA have been eroded by increasing volumes of steel imports into Mexico and Canada from other regions of the world,” Dempsey said.

“Foreign government subsidies and other market-distorting policies and practices have created massive global overcapacity in steel, fueling surges in exports from one region of the world to another as producers in countries with overcapacity export their excess production to other markets.”

Dempsey said tariff policies, to some extent, have been effective in the U.S., but aspects of the USMCA have decreased their effectiveness.

“By contrast to the situation in Mexico and Canada, non-North American steel imports into the United States have declined over the last 10 years,” he said. “This is due in significant part to the imposition of Section 232 tariffs, together with targeted antidumping and countervailing duty relief. But the lack of equivalent trade relief on steel imports into Mexico and Canada has allowed non-North American steel to take a larger and growing share of those two markets.”

On behalf of the aluminum sector, Johnson urged the administration and USMCA partners to take decisive steps to stop what he called a growing influx of unfairly subsidized Chinese aluminum entering the region.

“A renegotiated USMCA is needed to support American jobs, investment and national security,” the Aluminum Association says.

Specific to Chinese aluminum, the Aluminum Association reports that coil imports into Mexico are up nearly 500 percent year to date in 2025 compared with 2017, while subsidized coil imports into the region so far this year are equivalent to the capacity of a major U.S. rolling mill.

“Mexico and Canada should each adopt a steel tariff regimen equivalent in restrictive effect to the current Section 232 steel tariffs, creating in effect a common external steel tariff for all of North America," Dempsey told USTR regarding preventing triangular trading in the steel sector. 

“It is essential that there not be carveouts from the tariffs for selected countries due to existing free trade agreements or similar arrangements.”

In a related step, Dempsey said AISI recommends establishing a new melted and poured rule of origin for all steel products to qualify as originating in North America under the USMCA and the USMCA marking rules for steel products must also be amended to reflect this updated "melted and poured" rule of origin to prevent steel from outside the region from evading tariffs or accruing other benefits under the USMCA.

The U.S., Canada and Mexico are undertaking individual and joint reviews of the USMCA in a process with a July 1, 2026, deadline.