Cheese will probably be the commodity most directly affected by the tariffs Mexico is imposing on U.S. commodities in response to U.S. levies on steel and aluminum. That’s the gist of a report by Rabobank dairy analyst Tom Bailey. As of June 5, Bailey notes, nearly all U.S. cheese exports, which were previously tariff-exempt under NAFTA, now face tariffs of 10 to 15 percent, rising to 20 to 25 percent on July 5. In 2010, Mexico placed nearly identical tariffs on U.S. cheese during a trucking dispute but they had little effect on U.S. exports, as Mexico had no alternative suppliers. This time, however, Mexico has just signed a new trade agreement with the EU, and New Zealand is also in the process of negotiating a trade deal with Mexico. What’s at stake? Last year, the U.S. exported 97,000 metric tons of cheese to Mexico, accounting for 28 percent of total U.S. cheese exports and representing 80 percent of Mexico’s cheese imports. U.S.-made cheese accounted for 12 percent of all cheese consumed in Mexico in 2017.

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