Mexican import tariffs have been applied to US products. This announcement came in retaliation for the implementation of steel and aluminum duties by Donald Trump. The tariffs have been placed on imports into Mexico of US bourbon, cheese, pork, steel and whisky among other imported goods.
These tariffs are likely to hit US Republican areas and create issues prior to the mid-term November elections. Trump’s announcement of the US levies on aluminum and steel imports from outside the US, particularly from Canada, the EU, the UK, and Mexico has effectively turned some of America’s staunchest allies against it.
Mexican Import Tariffs go Beyond Tit-For-Tat
There will be repercussions and paybacks, but the nature of these are yet to be seen. The Mexican import tariffs may go beyond just tit-for-tat tariffs. Such reactions can seriously affect any relationship that existed between the US and Mexico, the EU and the UK. If Europe cannot trust its allies, then who can it trust? Not Trump appears to be the answer!
Business Power Tactics Do Not Always Work in Politics
The proposed Mexican import tariffs appear designed to hit President Trump in his Republican heartland. There seems to be a danger that the American president is applying business power tactics to politics. Business and politics are different animals, and what works with one may not work with the other. This is a policy that would not bode well for a genial relationship between the US, Canada, the EU, the UK and also Mexico.
Each of these countries has the individual capability and power to make life difficult for the average US citizen. Their combined power would be awesome if they responded to the US in kind.
Effects of Mexican Import Tariffs
Time will tell. Already, US pork producers are facing a 20% tariff on exporting pork to Mexico – the largest market for US pork farmers. Bourbon and some cheeses will face 20% – 25% tariffs. Mexico is a net importer of US steel, and it has stated its intention to apply a 25% duty on American steel imports. Not just steel, but steel products. US potato and apple growers will also suffer. Mexican import tariffs will definitely hit US producers.
If President Trump believed that there would be only a very small come-back on his policies, then he is very much mistaken it seems. These tit-for-tat tariffs will have a negative economic effect on US exporters. The biggest market for Iowan pork farmers is Mexico. A 20%-25% Mexican import tariff duty could potentially ruin their businesses.
Trade Protectionism Rarely Works
Only time will tell what the effects of President Trump’s policy will be. However, the smart money is on EU, UK, Canada, and Mexico finding alternative cheaper sources for such goods and foodstuffs. The NAFTA issue does not help matters! Time will tell how this issue pans out.
The latest announcement of Mexican import tariffs on US goods will hit many US producers and farmers hard. It seems like that this will develop into a trade war between the US and its (former) allies. Protectionism in trade has never worked in the past, and it is unlikely to work today!
