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5 percent tariff on Mexico could be imposed June 10

By RACHEL LANE

WASHINGTON, D.C. — The proposed tariff on all Mexican imports is not expected to help American consumers or farmers if it goes into effect. Said tariffs may take effect as early as June 10.

Last week, President Donald Trump threatened a 5 percent tariff on all Mexican imports unless the Mexican government stops the illegal immigration into the United States. The announcement was made the same day the U.S.-Mexico-Canada Agreement (USMCA) moved forward in all three countries, with statements of intent presented to the legislative body in each country.

The statement needs to be made 30 days before the leaders of the countries can send up a bill to approve using the new agreement, said David Salmonsen, senior director for Congressional Relations with the American Farm Bureau Federation.

The announcement was also made about two weeks after the U.S. lifted emergency tariffs on steel and aluminum imports from Canada and Mexico. They lifted their retaliatory tariffs at the same time. These tariffs were in place for about a year; Mexico had focused retaliation primarily on dairy, apples, and pork products from the U.S.

Salmonsen said no one knows how Mexico might respond, but retaliatory tariffs are likely. If it decides to tariff all U.S. imports or focus again on specific commodities, U.S. agriculture will be the most likely target. Whether dairy, apples, and pork may be the focus again, or instead other commodities, no one knows.

Luis Franco, head consul at the Consulate of Mexico in Indianapolis, said 5 million U.S. jobs are supported by trade with Mexico: 96,000 in Indiana, 61,000 in Kentucky, and 178,000 in Ohio.

“I do not seek confrontation. The peoples and nations we represent deserve that, whenever facing any conflict in our relations, however serious they may be, we resort to dialogue and act with prudence and responsibility,” wrote Andres Manuel Lopez Obrador, president of Mexico, in a letter to Trump translated and reported by The Wall Street Journal.

He suggested better communication between the two countries to address immigration – instead of taxes or coercive measures – which have overwhelmed the immigration system at the U.S.-Mexico border.

Tariffs Hurt the Heartland, a national organization of more than 150 businesses, released a statement opposing the tariffs: "Using tariffs to address unrelated policy objectives sets a dangerous precedent while creating significant uncertainty for American employers who are living tweet-by-tweet while trying to plan their business.

“Our farmers, who were closing in on a desperately needed win on updating access to North American markets, will instead now be faced with more uncertainty and new trade barriers. Congress can’t sit back and watch while the administration continues to unilaterally impose harmful tariffs, which are nothing but taxes on American businesses and families.”

David Herring, president of the National Pork Producers Council and a farmer from North Carolina, said the NPPC wants Trump to reconsider a new trade dispute. “American pork producers cannot afford retaliatory tariffs from its largest export market, tariffs which Mexico will surely implement,” he explained.

The trade disputes with China and Mexico, the largest two importers of U.S. pork, have cost American pork producers about $2.5 billion. It averaged about $12 per hog due to the trade dispute with Mexico. As of April 1, the value of U.S. pork exports to Mexico were down 28 percent from the same period in 2018.

If the trade war continues, U.S. pork producers will likely lose the entire Mexican market, which represented about 20 percent of total U.S. pork exports last year.

Herring would like to see the USMCA ratified, as well as a trade agreement with Japan and a resolution to the dispute with China, where an outbreak of African swine fever culling hogs could give U.S. pork producers an opportunity to expand market share.

He hopes the members of Congress who are working to restrict the administration’s trade relief programs take note. “While these programs provide only partial relief to the damage trade retaliation has exacted on U.S. agriculture, they are desperately needed,” Herring added.

Trump initially announced his plan via Twitter, then in a formal statement. He stated the tariffs would remain in place and increase in 5 percent increments every month until the tariffs reached 25 percent. The tariffs would remain in place until illegal migrants coming through Mexico stop, at which time the tariffs will be removed.

6/5/2019