It may have gotten lost in the United States’ trade war with China and immigration battle with Mexico, but President Donald Trump’s steep tariffs on all imported steel and aluminum were lifted on May 17.
With the change in the Trump Administration’s policy, Canada and Mexico received a reprieve on steel and aluminum coming from those two countries. The Trump Administration had placed a 25 percent tariff on steel and a 10 percent tariff on aluminum imports from Canada and Mexico in March 2018 (China’s tariffs are still in place).
“The tariffs meant a big hit for everyone,” said Alejandro Ayala Quijano, foreign trade manager for Riisa, an aluminum manufacturer based in Monterrey, Mexico. “The U.S. will always be our natural market; it is the biggest market and the closest market.”
Quijano said Riisa and many companies in Monterrey are centered around the automotive manufacturing business, which uses metals, particularly aluminum. Riisa’s aluminum is also used in such products as beverage cans, which are shipped to the U.S. via trucks through Laredo.
“When the tariffs came into play, we had to think of other places to locate metal to import – like South America, Europe and countries in Asia,” Quijano said. “But it’s not the same as importing from the U.S., because then you face other challenges, like distance, other documents that you don’t usually need to file when you import from the U.S.”
Now that the 10 percent aluminum tariff has been lifted, Quijano said Riisa plans to increase exports to the United States this summer and fall. Besides its main factory and headquarters in Monterrey, Riisa also has facilities in the Mexican cities of Silao, Mazatlan, and Pachuca.
“We were lucky to get the tariffs lifted, it has been great for us,” Quijano said. “What we have to do right now is just look at the market, getting as much aluminum as possible because this is the food of our company.”
Quijano said Riisa plans to increase its aluminum import process in part by leveraging the cross-border freight marketplace from Fr8Hub, a Laredo-based digital freight company specializing in U.S.-Mexico trade.
Fr8Hub’s digital freight marketplace matches cross-border truckers, brokers and shippers throughout Mexico and the domestic United States (to and from border cities) with available carriers and drivers for their loads.
Quijano estimated that they use the Laredo port of entry up to 1,000 times a month to transport aluminum and products, but truck capacity is tight right now.
The latest FreightWaves SONAR data shows outbound tender volumes in Laredo (OTVI.LRD) increased 483 basis points, or 11.59 percent, between Tuesday, July 2 and Wednesday, July 3.
“You can see that due to the tariff changes or other changes that happen on the border, Riisa can plan ahead, sometimes they cannot, then they need to direct their team drivers from their facility in Monterrey,” said Ohad Axelrod, chief executive officer of Fr8Hub. “Then through Fr8Hub’s platform, we can provide the service that Riisa and companies like it need in order to thrive in this dynamic world.”