On May 31st, the Trump Administration said it would be begin imposing tariff increases on Mexico because of an “ineffective response” by the country to the immigration issue at the U.S.-Mexico border. This would start at a 5% level on June 10 and increase to 25% by October 1 if current policies on immigration remain unchanged.
Naturally, with U.S. growers already suffering from the ongoing trade dispute with China, the news of a new tariff battle with Mexico was received unwelcomely. “The potential fallout from new tariffs is like struggling to survive a flood then getting hit by a tornado,” said U.S. Wheat Associates Chairman Chris Kolstad, a wheat grower in Ledger, MT. “Our customers in Mexico have been importing more U.S. wheat.”
Ben Scholz, President of the National Association of Wheat Growers, echoed these views. “We call on the President to rescind this threat immediately,” said Scholz. “We’ve been hit by low prices; we’ve been hit by rain and flooding that is hurting what was an excellent wheat crop; and now we’ve been hit again by the actions of our own government. We need to end indiscriminate use of tariffs now, one way or another.”
As a trading partner, Mexico is one of the largest export destinations for U.S. agricultural products such as soybeans, pork, and corn. In fact, according to government figures, Mexico was the top market for U.S. corn during 2017-18, with corn and corn products valued at $3.3 billion. Corn exports to the country reached a record high of 15.7 million tons (618 bushels), up 13% from the year before.
In the National Corn Growers Association (NCGA) release addressing the Mexican tariffs, President Lynn Chrisp highlighted these corn facts. “NCGA strongly urges the President to rethink applying new tariffs to Mexican goods and to reconsider using tariffs to address non-trade issues,” said Chrisp. “Amid a perfect storm of challenges in farm country, we cannot afford the uncertainty this action would bring.”