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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Farmers Justifiably Concerned Over Threatened Tariff on Mexican Imports

06/10/2019

The announcement by the President that the U.S. would impose an initial and progressive five percent tariff on imports from Mexico effective Monday 10th June created concern on both sides of the border among producers, industrialists and in the legislatures of both nations.

Adoption of USMCA was imperiled by the action since it was evident that Mexico would have imposed retaliatory tariffs that would directly impact the agricultural sector.

At issue is the contention by the White House that Mexico has done too little to stem the migration of refugees from Central America to the U.S. border. In response, Mexico offered to intensify detentions and sent a high-level delegation to Washington on Thursday, June 6th. Congress has expressed little support for the action with solid opposition from Democrats and subdued calls for moderation from Republicans.

David Herring, president of the National Pork Producers Council stated “Producers are extremely concerned about another potential trade retaliation from Mexico”. He added “Mexico is considered one of the most lucrative markets for American agricultural products given easy access and close proximity to the U.S. by rail, ship or truck”.

Veronica Nigh, an economist with the American Farm Bureau Federation commented “When you look at all the different products that the U.S. exports to Mexico, all those folks are getting nervous that retaliatory tariffs could certainly find their way into their products”.

In 2018, the U.S. exported $19 billion in agricultural products representing the second-largest purchaser after Canada. Mexico is the top market for U.S. poultry, eggs, corn and rice in addition to beef, pork, soybeans and wheat.

It is hoped that the announcement of a bilateral agreement by the White House will resolve the immediate crisis. Unfortunately Mexico, in the words of their former Foreign Minister “always says yes but is vague on when”. In the event of non-compliance the Administration has threatened to impose punitive tariffs. In this event, farmers and manufacturers in the U.S. will suffer due to reduced trade and disruption of supply chains. Additional costs will ultimately be borne by consumers. 


 
Copyright 2019 Simon M. Shane