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Reaction to President Trump’s Announcement of Potential New Tariffs on all Mexican Imports in an Effort to stop Illegal Immigration

Reaction was swift from agriculture groups and organizations following President Trump announced tariffs on all Mexican imports starting on June 10, in an effort to stop illegal immigration.

The President says he was invoking the authorities granted to him by the International Emergency Economic Powers Act. On June 10, the President will impose a five percent tariff on all goods imported from Mexico. The President says if the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgement, the tariffs will be removed. The President says if the crisis persists, the tariffs will be raised to 10 percent on July 1. It will be increased to 15 percent on August 1, 20 percent on September 1 and to 25 percent on October 1. The President says the tariffs will permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory. President Trump says workers who come to our country through the legal admissions process, including those working on farms, ranches, and in other businesses, will be allowed easy passage.

 

U.S. Grains Council President and CEO Tom Sleight:

“At such a critical time for U.S. farmers, new talk of tariffs on Mexican products challenges the complex relationship we have with the top international buyer of U.S. grains and related products. We agree continued negotiations are the correct path to ensure stability in our markets, particularly as South American corn becomes a viable option for Mexican customers. As this political and market situation develops, we will remain in close touch with our stakeholders here at home and in Mexico to help maintain the stability of our longstanding partnership.”

 

National Corn Growers Association President Lynn Chrisp:

“NCGA strongly urges the President to rethink applying new tariffs to Mexican goods and to reconsider using tariffs to address non-trade issues. Mexico is the top customer for U.S. corn. Corn farmers want to continue working with the Administration and Congress to ratify the new U.S.-Mexico-Canada Agreement and pursue new trade agreements. The recent deal to lift steel and aluminum tariffs on Mexico and Canada was an important breakthrough for USCMA but new tariffs threaten to reverse that progress. Amid a perfect storm of challenges in farm country, we cannot afford the uncertainty this action would bring.”

 

Mexico was the top market for U.S. corn in 2017/2018, with corn and corn product exports valued at $3.3 billion. Corn exports to Mexico reached a record high of 15.7 million tons (618 million bushels), up nearly 13 percent from 2016/2017. Mexico was also the top buyer of U.S. distiller’s dried grains with solubles (DDGS), purchasing 2.13 million tons in 2017/2018 – up 3 percent year-over-year.

 

U.S. Wheat Associates Chairman Chris Kolstad and National Association of Wheat Growers President Ben Scholz:

This action threatens to undermine approval of the U.S-Mexico-Canada Agreement and puts crucial wheat demand in Mexico at great risk.

“We respectfully ask the Administration not to implement these new tariffs. The potential fallout for farmers would be like struggling to survive a flood then getting hit by a tornado,” said Chris Kolstad, Chairman of USW and a wheat farmer from Ledger, Mont.

Bad feelings abounded in Mexico after the President publicly threatened to withdraw from NAFTA and imposed duties because certain Mexican products were called national security risks to the United States. Their government and industries, including flour millers, set out to broaden their supply sources. In 2018, Mexico increased its total wheat imports significantly, but U.S. wheat imports actually declined that year.

“With progress on the USMCA — most recently cancellation of the steel and aluminum tariffs — our customers in Mexico have been importing more U.S. wheat,” Kolstad said. “In a very disheartening coincidence, our organization is holding a conference next week with our Mexican customers partly to remind them how important they are to us. Of course, the cost of the conference is funded by the Agricultural Trade Promotion program that was awarded because U.S. wheat farmers proved they were being hurt by retaliatory tariffs.”

“We call on the President to rescind this threat immediately,” said Ben Scholz, President of NAWG and a wheat farmer from Lavon, Tex. “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.”

 

National Pork Producers Council President David Herring:

“We appeal to President Trump to reconsider plans to open a new trade dispute with Mexico. American pork producers cannot afford retaliatory tariffs from its largest export market, tariffs which Mexico will surely implement. Over the last year, trade disputes with Mexico and China have cost hard-working U.S. pork producers and their families approximately $2.5 billion.

“Let’s move forward with ratification of the United States-Mexico-Canada trade agreement, preserving zero-tariff pork trade in North America for the long term; complete a trade agreement with Japan; and resolve the trade dispute with China, where U.S. pork has a historic opportunity to dramatically expand exports given the countries struggle with African swine fever.

“We hope those members of Congress who are working to restrict the administration’s trade relief programs take note. While these programs provide only partial relief to the damage trade retaliation has exacted on U.S. agriculture, they are desperately needed. We need the full participation of all organizations involved in the U.S. pork supply chain for these programs to deliver their intended benefits.”

 

 

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