MISSION, RGV – U.S. Rep. Henry Cuellar says the new tariffs U.S. imposed will harm relations with our closest trading partners.
While renegotiation of the North American Free Trade Agreement is underway, last week President Donald Trump announced 232 new tariffs on products such as aluminum and steel. The administration imposed a 25 percent steel tariff and a 10 percent aluminum tariff on Mexico and Canada. Metal tariffs were also imposed on the European Union and Japan.
In a press release, Cuellar said slapping tariffs on friends is bad business; inducing volatility in global markets that does not encourage business investment and expansion.
“The President’s decision to impose steel and aluminum tariffs on key trading partners will harm relations with our closest trading partners, create market inefficiencies and raise the prices of consumer products,” Cuellar said in the press release. “This is a misguided effort to protect the American aluminum and steel industries to put pressure on our Canadian and Mexican allies in NAFTA negotiations.”
Cuellar said tariffs often result in retaliatory actions by target countries and Mexico responded so. The country implemented tariffs on products such as steel, pork and agricultural goods, effective June 5. The following is a summary of the Mexican decree by the Mexican Secretariat of Economy:
The United States’ decision to impose these duties contradicts the international community framework on tariffs and international trade and therefore subjects them to Chapter VIII: NAFTA Emergency Measures, which allows for Mexico’s Decree. The Decree suspends the preferential tariff treatment between the United States and Mexico, allowing the latter to implement duties on a variety of products such as pork meat, some types of cheese, apples, cranberries, whiskey, steel, motor boats, among others. The Decree also established that Mexico would modify the value of pre-existing tariffs, which also applied to a number of imports from the United States. The measure officially enters into force on the date of its publication in the Official Gazette of the Federation – June 5, 2018.
Based on a document provided by the Mexican Secretariat of Economy, some of the products with tariffs include pork, ham, apples and steel. The tariffs on these specific products will strongly affect U.S. exports because approximately 99 percent of pork, fresh legs and shoulders with bone, were Mexico’s market share from Texas, South Dakota, Virginia and Kansas. Other products from Texas that were 99 percent of Mexico’s market share include ham, iron and steel.
According to a representative from the Mexican Secretariat of Economy, the tariffs imposed on U.S. products by Mexico targets Republicans with strong connections to exports. One example is Vice President Mike Pence’s home state of Indiana being the largest steel exporter in the U.S.
Another example is U.S. Rep. Kevin McCarthy, the U.S. House majority leader, who represents one of the top agricultural districts in the country. His area in California produces approximately $3 billion of agricultural goods every year and the new tariffs imposed by Mexico affect these.
Now, Congress and the administration will have to answer to these districts about why their exports are decreasing, the Mexican Secretariat of Economy told the Rio Grande Guardian. However, despite the new tariffs, President Enrique Peña Nieto is still willing to negotiate NAFTA and will do so until his last day in office, a representative for the Secretariat said.