Mexico wants US pork tax

Mexico is planning retaliation against the United States (US) for its tariffs on Mexican steel. The Mexicans are thinking of import duties on various American agricultural products (such as fruit, dairy and pork).

In addition to the fact that the US launched tariffs on steel and aluminum from China, it was announced last week that imports from the European Union (EU) and neighboring countries Canada and Mexico will also be taxed. The countries concerned have reacted disappointingly to President Donald Trump's decision. The countries are now considering countermeasures.

Neighboring countries at gunpoint
The American Meat Export Agency (USMEF) has received signals that the southern neighbors will tax the import of various pork parts (such as the bellies) with 20%. In addition, Mexico would also like to introduce tariffs on products such as cheese, yogurt and American fruit. Canada is also likely to come up with countermeasures. Canada, like the EU, will file a complaint against the US import duties with the World Trade Organization (WTO).

serious volumes
USMEF CEO Dan Halstrom is displeased that American pork is again a victim in Trump's trade war. At an earlier stage, China already announced tariffs on american pork† According to Halstrom, both American producers and Mexican consumers are losers in the trade war. Halstrom hopes that the levies on pork will expire as soon as possible. These would be in the billions walk.

All the more so because the EU and Mexico signed a trade agreement this spring, whereby the import duties on agricultural products (pork) expired. Due to the transport distance, the US has a competitive advantage over the EU. This advantage could be negated if Mexico starts to tax American pork. Mexico is the main buyer of American pork; in 2017, the US exported 800.000 tons of pork worth $1,51 billion; especially the ham export is a great flow.

NAFTA in uncertainty
With the US in a trade war with neighbors Canada and Mexico, the future of the North American Free Trade Agreement is… 'NAFTA' didn't get any more confident. Various media report that the end of the treaty is even near. Last week, Trump again indicated that he was more in favor of open trade agreements with Canada and Mexico.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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