Increased purchases of ag part of Mexico 5% tariff deal

Administration’s push to implement 5% tariff on June 10 causing great concern to those in agriculture.

Jacqui Fatka, Policy editor

June 7, 2019

3 Min Read
Increased purchases of ag part of Mexico 5% tariff deal
Racide/Getty Images/Istock

U.S. and Mexican government officials met several times during June 4-6 to discuss and possibly head off looming tariffs on Mexico imports that will go into effect on Monday, June 10. President Trump announced plans May 30 to impose 5% tariffs on all Mexican imports as of June 10, with tariffs ratcheting up to 25% each month if Mexico does not stop the flow of Central Americans into the United States.

In a tweet Friday afternoon, President Trump said if an agreement can be forged with Mexico it would include increased farm and agricultural product purchases as part of any deal.

As of Friday afternoon, no agreement had been reached, while President Trump has drafted plans for a new national emergency declaration in order to impose tariffs on Mexico. Congressional Republicans reportedly are considering whether to vote to block the administration's planned new tariffs.

Additionally, the National Pork Producers Council (NPPC) Friday afternoon signed onto a statement issued by organizations representing a cross-section of U.S. economic sectors addressing the importance of tariff-free trade in North America as a cornerstone of U.S. economic growth. "Tariffs on Mexican imports would harm U.S. consumers, workers, farmers and businesses of all sizes across all sectors, making us less competitive and undermining efforts to negotiate strong trade deals in the future. We oppose unilateral tariffs and any subsequent retaliation," according to the joint statement, initiated by the U.S. Chamber of Commerce, said.

Related:Trump’s Mexico tariff threat could blow up USMCA progress

The Chamber reported that $17 billion is the potential tax increasethat would be passed along to American businesses and consumers by a 5% tariff on important goods from Mexico, which last year totaled $346.5 billion. Should the tariff reach the President’s threatened cap of 25%, that tax would eclipse $86 billion. “But given how even a 5% tariff can disrupt trade flows, the economic impact could be much larger,” the Chamber of Commerce stated.

In an interview with CNBC this week, NPPC president David Herring said, "Producers are extremely concerned about another potential trade retaliation from Mexico. We just got away from the 20% punitive tariffs just a few weeks ago." Over the last year, trade disputes with Mexico and China have cost hard-working U.S. pork producers and their families approximately $2.5 billion. NPPC urges we move past these tariffs by ratifying the United States-Mexico-Canada agreement, complete a trade agreement with Japan and resolve the trade dispute with China.

Related:Ag secretaries discuss 5% tariff threat to Mexico

While speaking in Pennsylvania Thursday, Vice President Mike Pence said in discussions with Mexico it was revealed that last month alone, over 144,000 people entered the United States illegally.

“The President directed us — myself, the Secretary of State, and our team — to meet with the Mexican delegation, at their request, and hear them out.  Progress was made… And we made it clear yesterday [Wednesday] at the White House that Mexico must do significantly more to end this crisis of illegal immigration at our border.  We called on them to take even more steps — more decisive action,” Pence said.

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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