Fear grows of long-lasting damage from Mexican ag tariffs

U.S. farmers are already hurting, thanks to Mexico’s retaliatory tariffs for U.S. import taxes on steel and aluminum, but the pain is expected to increase sharply in the weeks and months to come. U.S. exporters have become accustomed to the zero duties under the North American Free Trade Agreement, but the new tariffs are still equal to or below what Mexico charges most other major suppliers. That means the U.S. can still compete thanks to the closeness of the two countries, both geographically and in shared supply channels.“Trade is not going to stop right away,” said one U.S. industry official. “We’re going to continue to sell.” But on July 5, those tariffs will rise to a range of 20 to 25 percent, and that’s expected to do severe damage – perhaps lasting damage – to U.S. dairy farmers’ largest foreign market. “A 10-15 percent jump from zero – especially since other trading partners don’t have zero percent access – that’s not the end of the world,” another dairy industry representative said. “Certainly that’s going to bite a lot more once we’re up closer to levels that (other foreign exporters) have to pay, in the 20-25 percent range.” That threat prompted dozens of dairy companies and groups to send a letter to President Donald Trump on Tuesday, pleading for him to suspend the steel and aluminum tariffs on Mexican exporters. U.S. potato farmers are also being hurt by Mexico’s retaliatory tariffs on frozen french fries while Mexican consumers will likely not suffer at all, National Potato Council CEO John Keeling told Agri-Pulse. “They know that it hits the U.S. and they can still get all the french fries they need because they’re all going to come from Canada,” he said. “What happens in the short run is that volume shifts to Canada. In the long term, those shifts will become permanent.”