RETALIATORY MEASURES AGAINST THE U.S. AFTER THE INCREASE IN TARIFFS AND NEW EFFORTS TO PROMOTE THE HEALTHY COMPETITION IN THE NATIONAL STEEL INDUSTRY.

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RETALIATORY MEASURES AGAINST THE U.S. AFTER THE INCREASE IN TARIFFS AND NEW EFFORTS TO PROMOTE THE HEALTHY COMPETITION IN THE NATIONAL STEEL INDUSTRY.

On June 5th, the Ministry of Economy published the «Decree that modifies Import and Export Tariff, the Decree that establishes the applicable duty rate for goods originating in North America and the PROSEC Decree», which establishes the following actions:

• RETALIATORY MEASURES AGAINST THE U.S. AFTER THE INCREASE IN ITS TARIFFS.

Mexico suspended the preferential tariffs applicable to the imports of 71 HTS Codes, including pork’s legs and hams, cheese, apple, potatoes, blueberry, whisky, various Steel and aluminum products, as well as boat’s motors and it has established a tariff up to 25% for import products. The above mentioned only apply to definitive imports, and excludes the possibility to apply PROSEC decree and the preferential rate to the Mexican border zones. It is important to consider that these tariff increase is not applicable to temporary imports, as long as they are returned abroad.

• TEMPORARY INCREASE OF THE RATE OF THE GENERAL IMPORT DUTY FOR STEEL PRODUCTS.

Given the increase of exports to our country and a rebalancing of trade due to the excess of capacity of such products at global level, the federal government has established a temporary tariff of 15 percent ad valorem, to 186 tariff fractions of steel products (including steel plate related products, leaf plate, roll plate, cold rolled steel, hot rolled laminates steel, wire rod, seamless pipes, seamed tubes, foil coated, etc.) This measure will be in force until January 31, 2019.

• OTHER PROVISIONS RELATED TO THE DECREE IMPLEMENTATION.

The 1602.00.02 HTS code has been created. The descriptions to the HTS codes 7304.11.03, 7304.19.03, 7304.39.07 and 7304.59.08 have been modified. The HTS codes 7210.49.01, 7210.49.02 and 7210.49.04 have been withdrawn. The explanatory note of national application to the chapter 73 has been added. The HTS codes of the article 5^th of the PROSEC Decree have been modified to exempt several tariff codes from import duties.

The previous amendments have entered into force on June 5^th, 2018.

SINCERELY,

Mexico City, June 12th, 2018.