Trade War Imminent? Mexico Imposes Tariffs on $3 Billion Worth of US Exports

By Edward Leano, Christian Post Contributor Thursday, June 07, 2018

There's a war brewing up, and for now, it's over things like pork, bourbon and cheese. Mexico has responded to the Trump administration's recent move to raise tariffs on steel and aluminum imports by hitting back with tariffs of their own, mainly aimed at U.S. agricultural exports.

A trade dispute is definitely in full swing right now as Mexico imposed a set of new tariffs that range between 15 to 25 percent, a new policy that will hike the price of U.S. exports including pork, bourbon, apples, potatoes, and several types of cheese. These hikes are now seen as a serious blow to U.S. exporters dependent on the Mexico market, as CNN noted.

These new tariffs are seen as Mexico's response to the Trump administration's decision to raise steep tariffs on imported metals, ones that raised penalties to 25 percent for imported steel and ten percent for imported aluminum, which mostly affected Canada, Mexico and the European Union.

Mexico was among the trade blocs that have vowed to retaliate, as shown by their recent action against U.S. exports. Canadian officials have also announced that they are planning tariffs on $12.8 billion worth of U.S. exports as well.

"Let me be clear, these tariffs are totally unacceptable," Prime Minister Justin Trudeau said at the time. The EU has also announced a new set of tariffs to retaliate, hiking up penalties by 25 percent for around 200 American exports ranging from orange juice to motorcycles.

Mexico has been the largest market for U.S. pork, according to the industry trade group National Pork Producers Council. By their estimate, a full 25 percent of U.S. pork exports were bought up by its southern neighbor alone.

With the recently enacted tariffs, U.S. pork exporters might as well give up on the Mexican market altogether. "A 20% tariff eliminates our ability to compete effectively in Mexico," trade group president Jim Heimerl, himself a pork producer based in Johnstown, Ohio, said about the new tariff hikes.

"This is devastating to my family and pork producing families across the United States," Heimerl added.

These tariffs look to be squarely aimed at certain U.S. states and districts as a way to maximize the impact they will have on trade negotiations, as the Modern Farmer pointed out. Mexico's new tariff on bourbon, for example, will adversely affect Kentucky, the home state of Senate Majority Leader Mitch McConnell.

Putting up a 20 percent hike on pork imports would put a squeeze on U.S. pork producers everywhere, but especially in Iowa where a competitive Senate race is about to go on. The new tariff on motorboats, one of the few non-agricultural items on Mexico's list, looks to be aimed at Marco Rubio's home state of Florida.