00:00I'm here in the studio. I'm pleased to say we have Raul Guterres Mugueza, who's chairman of Decero,
00:05which is an industrial group specializing in the production of steel cables.
00:09So, a tariff on steel clearly has an impact on your business.
00:13Of course, yes.
00:14Tell us about that.
00:15Yes, we are very worried about the new world order that we call on all this commerce,
00:23all the trade of goods around the world,
00:25especially because of the United States supplying all these tariffs unilaterally and not reciprocal.
00:34So, we're very worried.
00:35We are also very worried that China is still subsidizing most of its exports.
00:45And so, we are squeezed between these two great powers with a great challenge for countries like us
00:52and for many other countries around the world.
00:54One of the things that seems very unfair about what Donald Trump has decided to do is
00:58it seems very arbitrary, random, the way he's just put these tariffs on certain countries.
01:02Would you agree with that?
01:03Yes, totally agree.
01:05It is a paradox because, like, for instance, in steel,
01:08he has applied 50% tariffs on all of the countries in a general way
01:13and made an exemption for the U.K.,
01:19but the only country that they export more, that they import, is in Mexico.
01:25They have a surplus.
01:27And still, they are applying those tariffs.
01:29And they are talking, when we talk with them and say,
01:33hey, you are exporting more.
01:34You know, this is not fair or it's not a fair game.
01:38They just put it aside.
01:42Raul, I'm not an expert on these matters,
01:44but I know from picking up things in passing that we live in a world now
01:48which is interconnected and more or less globalized.
01:51Products are rarely just made in one country.
01:54There are components coming from different countries into things.
01:56Yes.
01:56Say, a car that's made in the United States may well have components
01:59coming from Canada or Mexico.
02:01So, surely, this points to tariffs really being, in some ways,
02:05self-defeating for Trump.
02:06That's correct.
02:07That's correct.
02:08And actually, most of the companies that export from Mexico to the United States
02:12are American companies.
02:14Only out of the, just the automobiles,
02:19$180 billion export from Mexico to the United States.
02:23There's not a single Mexican company, per se, you know.
02:26It's mostly American companies and other countries.
02:30So, they're applying tariffs to their own companies.
02:34Of course, it's hurting us because it hurts the production in our country
02:40and the work and etc.
02:42Now, your company, just to talk about De Acero a little bit.
02:45Biggest recycler in Mexico.
02:47Yes.
02:47I believe that is something that should be, to coin a phrase in English,
02:51a feather in your cap, something to be proud about.
02:52Yes, yes.
02:53So, when you hear you get tariffs slapped upon you for what you do normally,
02:56you think, well, we make all this effort.
02:58We recycle all these goods.
02:59We've got a good reputation on that.
03:01That must make you feel that it's very unfair what happens to you.
03:04Totally unfair.
03:05And you know what?
03:06We don't have subsidies.
03:09And we believe the problem is China.
03:11And it's not that I agree with what the United States is doing,
03:15but they have a reason.
03:16And this is because China, since 20, 25 years ago,
03:20they disrupted, they started disrupting the market by subsidizing.
03:24And they subsidize, especially the steel industry,
03:28which is very capital intensive.
03:30They subsidize mostly by the capital.
03:36That's what they subsidize.
03:39Also, about other things, such as export subsidies and other types of subsidies,
03:47but the capital, they subsidize because they are state-owned companies.
03:52And they don't need to have a decent or a return on capital.
03:58So we, as investors, private investors, we need to have a decent return on capital,
04:04at least what our cost of capital is, right?
04:08Well, state capitalism doesn't need that.
04:13They just pour the money.
04:14And you have done a lot, your company, De Acero,
04:17a lot for what's called the circular economy,
04:19but also for the De Acero decarbonisation across Latin America.
04:23Again, you've got your company with an eye on what happens locally,
04:27an eye on helping communities,
04:29but again, now getting really hurt by these tariffs.
04:32Yes, yes.
04:33We believe, we are firm believers on the environmental impact.
04:37And we are one of the lowest in the world, ourselves, our company,
04:43because we are totally 100% recycled.
04:46And we use more than 20% of our energy is renewable energy, solar and wind.
04:53And we have committed ourselves with our government to go up to 55% on solar and wind.
05:01That will make us the lowest carbon emission on the steel industry.
05:06It's just occurred to me, Raul, that might be something Donald Trump doesn't like,
05:09because he's all about fossil fuels and drilling for those kind of things
05:12and creating and going back to old school ways of doing things.
05:15Maybe, I'm not suggesting he's done it deliberately because of your business and how you do that,
05:19but clearly you must feel aggrieved, upset, angry about what is being done to you.
05:24Very angry, very upset.
05:26We are trying to be patient, and also our government has been very patient.
05:32Our president has been very patient.
05:34And I think she's doing so far a very good job trying to go against this kind of extortion
05:43that they are putting not only on us, but all over the world.
05:47So we're trying to prove them different.
05:51For instance, they have a surplus with us.
05:53Again, I told you, and we have told them, it says, no, you don't have a surplus.
05:57What do you mean?
05:58The numbers are there.
05:59And now, after four months, they say, OK, you have a surplus, but we have a deficit on the other goods.
06:08You divided the steel into a different thing, you know, besides the other things.
06:13You never win so far.
06:14But we are being patient, and we hope that in the next two months, we can get something of a better negotiation with the United States.
06:25We hope so.
06:26Indeed, but those guarantees that prolongation will actually sort of work the way you want it to.
06:30Raúl, we're out of time.
06:31Thank you, sir, for joining us and taking the time to be with us.
06:33Raúl Gutierrez-Muguereta of the company Deacero, which is an industrial group specializing in the production of steel cables, giving us a real sense of how tariffs imposed on Mexico are affecting his business, his employees, and his market.
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