Ag Policy Blog

Canada and Mexico Drop Retaliatory Tariffs on U.S. Ag Products

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Farm groups on Monday expressed some relief that Canada and Mexico followed suit on Monday and dropped retaliatory tariffs against U.S. farm products.

Canada and Mexico combined amount to $39 billion in agricultural exports for the U.S. and several commodities were swept up in retaliatory tariffs. Last Friday, the Trump Administration agreed to drop its steel and aluminum tariffs on Canada and Mexico. The two countries each announced they were removing their tariffs as well.

The U.S. Meat Export Federation cited that the Mexican government dropped its retaliatory tariffs on U.S. pork and Canada had also dropped its 10% tariff on prepared beef items from the U.S.
"Restoring duty-free access to the Mexican and Canadian markets is a tremendous breakthrough for the U.S. red meat industry," said Dan Halstrom, president and CEO Dan Halstrom of USMEF. Halstrom thanked President Trump and Ambassador Robert Lighthizer for reaching an agreement with Mexico and Canada. "This also removes a significant obstacle for the U.S.-Mexico-Canada Agreement (USMCA), and USMEF is hopeful that all three countries ratify USMCA as soon as possible."

Mexico also lifted retaliatory tariffs on U.S. cheese exports. The National Milk Producers Federation said "hard work remains" for Congress and the Trump Administration to improve the trade outlook for dairy farmers, though.

“Dairy farmers have much to celebrate, with the resumption of normal business with our largest export partner,” said Jim Mulhern, president and CEO of NMPF. “To move forward in boosting exports, Congress needs to pass the USMCA, and administration officials need to resolve the latest impasse in U.S. negotiations with China in a way that’s favorable to producers. Meanwhile, trade negotiations with Japan and other key partners also must move ahead. The time for progress on all fronts is now.”

Mexico is the top market for U.S. dairy products at $1.4 billion a year in sales, NMPF stated.

The U.S. Apple Association was another group happy to see duty-free access to Mexico return. Mexico is also the largest market for U.S. apply exports as well.

“Removal of the Section 232 tariffs and ratification of the United States-Mexico-Canada Agreement (USMCA) have been our top priorities," said Jim Bair, president and CEO of the U.S. Apple Association. "Our efforts are now focused on securing congressional support and ratification of the USMCA, which will provide increased stability and predictability going forward."

Vice President Mike Pence was dispatched Monday to Jacksonville, Florida, largely to talk about USMCA for manufacturing, but he did briefly touch on agriculture as well.

"We believe it’s absolutely essential that it get passed by the Congress because it will also finally allow American workers and farmers to compete in this hemisphere on a level playing field.," Pence said. "The USMCA actually is going to end programs in Canada that allow low-priced products to undercut American dairy. The agreement is going to ensure that product grading is fair and transparent. It’ll also help Americans protect the innovative technologies that give us an edge in global marketplace."

Chris Clayton can be reached at Chris.Clayton@dtn.com

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