Mexico today followed through with its threat to hit back against U.S. steel and aluminum tariffs by punishing the U.S. ag sector. Mexico announced it is immediately slapping tariffs ranging from 10 to 20 percent on U.S. pork, cheese, apples, potatoes and other commodities.
The tariffs are wide-ranging and are expected to cause significant harm to U.S. farmers and ranchers who have come to rely on the steady exports to Mexico, which had virtually no tariffs on U.S. ag products thanks to the North American Free Trade Agreement.
Mexico is immediately placing a 10 percent tariff on unprocessed pork, which will rise to 20 percent on July 5, according to an analysis of the announcement by the National Pork Producers Council.
“The toll on rural America from escalating trade disputes with critically important trade partners is mounting,” said NPPC President Jim Heimerl. “Mexico is U.S. pork’s largest export market, representing nearly 25 percent of all U.S. pork shipments last year. A 20 percent tariff eliminates our ability to compete effectively in Mexico. This is devastating to my family and pork producing families across the United States.”
The new Mexican tariffs will only serve to compound the problem of U.S. pork producers, who are already suffering from Chinese tariffs that the country levied in April as a response to U.S. tariffs on steel and aluminum. The Trump administration had been exempting Mexico and Canada from the steel and aluminum tariffs, but it decided last week to revoke that exclusion because the two countries failed to agree to U.S. demands in talks to renegotiate the North American Free Trade Agreement.
NPPC said today that China’s 25 percent tariffs are “reducing live hog values by as much as $18 per animal on an annualized basis.”
U.S. apple farmers are also bracing for harm. The U.S. sells about $215 million worth of duty-free apples every year to Mexico, its largest foreign market. Now those exports will be met with 20 percent tariffs.
Mexico is also the largest market for U.S. dairy exports and industry officials are expecting the tariffs to be painful because they apply to virtually all of the cheese that the U.S. ships south of the border. Some types of cheese like hard Italian varieties will be subject to a 10 percent tariff that goes up to 20 percent in a month. Other types including fresh cheese will be hit with a 15 percent tariff that goes up to 25 percent.
“For us, it’s very unfortunate,” said Jaime Castaneda, senior vice president for trade policy of the U.S. Dairy Export Council. “This is significant for our farmers, processors and our exporters.”