Trade War With Mexico Back in Play?

President Trump announced his intention to impose a five percent tariff on Mexican imports because of illegal immigration. He vows to keep those tariffs in place until Mexico stops illegal immigrants from entering the U.S. through the southern border. The proposed move will take effect on June 10 and doesn’t give Mexico a lot of time to react to it.

Trump says the levy “would gradually increase until the illegal immigration problem is remedied, at which time the tariff will be removed.” The tariffs could potentially go as high as 25 percent by October 1.

Mexican President Obrador said in a letter to Trump on Twitter that he “doesn’t want confrontation.” Mexico’s foreign minister and other officials were scheduled to visit Washington D.C. last week in order to come to an agreement. Mexico’s undersecretary for foreign relations for North America told reporters that Mexico wouldn’t retaliate before discussing the matter with the U.S. The National Pork Producers president David Herring appealed to Trump to reconsider his plan.

“American pork producers cannot afford retaliatory tariffs from its largest export market which Mexico will surely implement,” Herring said. “Over the last year, trade disputes with Mexico and China have cost hard-working U.S. pork producers and their families about $2.5 billion.”

Herring is asking Washington to move forward with ratification of the U.S.-Mexico-Canada trade agreement and preserve zero-tariff pork trade in North America for the long term.

Iowa State University Economist Dermot Hayes reports American pork farmers have lost about $12 per hog due over the past year to trade retaliation by Mexico, which recently lifted the retaliatory tariffs last week. Hayes said U.S. pork producers could lose the entire Mexican market if they face protracted retaliation. Mexico brought in 20 percent of total U.S. pork exports last year.