The United States must stop its tariffs on Canadian and Mexican steel and aluminum imports to allow the U.S. to benefit from the U.S.-Mexico-Canada Agreement (USMCA), the National Pork Producers Council (NPPC) says.
NPPC’s call to end tariffs is backed by “a diverse, ad hoc coalition of more than 45 groups representing many sectors of the U.S. economy,” a NPPC release
The Trump administration placed a 25 percent tariff on steel, and a 10 percent duty on Canadian and Mexican aluminum imports in early June 2018. Both Canada and Mexico retaliated against several U.S. products.
American ag organizations and businesses sent a letter
Wednesday to Wilbur Ross, commerce secretary, and Robert Lighthizer, U.S. trade representative. The U.S. needs to lift metal tariffs to encourage Mexico and Canada to withdraw their duties on U.S. goods, the letter said. The American government should resolve the metals quarrel quickly to allow ag organizations and businesses to focus on “generating congressional support for the USMCA, negotiations on which were concluded last fall,” the release said.
“For many producers … the damage from the reciprocal trade actions in the steel and aluminum dispute far outweighs any benefit that may accrue to them from the USMCA,” the letter said. “We urge the administration to work with the Canadians and Mexicans on a prompt resolution of the metals issue.”
The tariffs are affecting the private sector’s ability to lobby for ratification of the USMCA, said Jim Heimerl, NPPC president and Ohio pork producer.
“For many sectors, the duties are a hair-on-fire issue that is draining resources that otherwise would be focused on passage of the USMCA,” he said.
Under the North American Free Trade Agreement (NAFTA), U.S. pork entered Mexico and Canada duty free, Dave Warner, NPPC’s communications director, told Farms.com today.
“The new USMCA maintains that zero-tariff access,” he said. “But, the U.S. pork industry wouldn’t be able to take advantage of that access to Mexico because of that country’s retaliatory tariff on pork.
“After the United States imposed tariffs on Mexican and Canadian steel and aluminum imports, Mexico put a retaliatory tariff – first 10 percent, then 20 percent -- on U.S. pork. If the U.S. rescinds its metals tariffs, Mexico (and Canada) likely will drop their tariffs on U.S. products.”
Mexico’s tariff on U.S. pork costs American producers $12 per pig, resulting in a $1.5 billion annual loss industrywide, said Dermot Hayes, Iowa State University economist, referenced in the release.
“The Mexican 20 percent tariff on U.S. pork is significant,” added Warner. “Mexico is our No. 2 export market; we shipped more than $1.5-billion of pork there in 2017.
“But, because of the retaliatory duty, U.S. pork exports to Mexico were down by 9 percent through October 2018 compared with the same time in 2017.”
Updated Jan. 29, 2019
Pork Checkoff photo