Mexico hits back at US with trade tariffs

MEXICO CITY • Mexico has put tariffs on American products ranging from steel to pork and bourbon, responding to US President Donald Trump's metal tariffs and taking aim at Republican strongholds ahead of US congressional elections in November.

Mr Trump last week rattled some of the United States' closest allies by removing an exemption to tariffs on imported steel and aluminium that his administration had granted to Mexico, Canada and the European Union.

Mexico's retaliatory list, published in the government's official gazette, included a 20 per cent tariff on US pork legs and shoulders, apples and potatoes, and 20 to 25 per cent duties on types of cheeses and bourbon.

A net importer of US steel, Mexico is also putting 25 per cent duties on a range of American steel products.

American pork producers, for whom Mexico is the largest export market, were dismayed by the move. The president of the US National Pork Producers Council, Mr Jim Heimerl, said Mexico accounted for nearly 25 per cent of all pork shipments last year, adding that "a 20 per cent tariff eliminates our ability to compete effectively in Mexico".

Mexico's response on Tuesday further raises the trade tensions between the two countries.

Mexican trade negotiators designed the list, in part, to include products exported by top Republican leaders' states, according to a trade source familiar with the matter. These include Indiana, where Vice-President Mike Pence was formerly governor. The new tariffs could have political implications in some hotly contested races as the Republicans seek to maintain control of both chambers of Congress in November's election.

The move also adds a new complication to efforts to renegotiate the trillion-dollar North American Free Trade Agreement (Nafta) between Canada, the United States and Mexico. Trump economic adviser Larry Kudlow on Tuesday revived the possibility that the President will seek to replace Nafta with bilateral deals with Canada and Mexico, something both countries say they oppose.

Separately, Mexico also took steps on Tuesday to make it more attractive for other countries to send it pork by opening a tariff-free quota for some pork imports. Economy Minister Ildefonso Guajardo said his country would now "surely" look to Europe for pork products.

REUTERS

A version of this article appeared in the print edition of The Straits Times on June 07, 2018, with the headline 'Mexico hits back at US with trade tariffs'. Print Edition | Subscribe