Ag Policy Blog

The Mexican government on Saturday announced a 50% tariff on all white corn imports, a move that is estimated to impact about 1% of U.S. corn production but 20% of U.S. corn exports to Mexico.

The new tariff, coming just three years after the U.S. Mexico Canada (USMCA) deal was ratified, draws another line in the sand between U.S. trade policy and Mexican President Andres Manuel Lopez Obrador.

The Associated Press and others initially reported the Mexican tariffs, which were published in Mexico's official journal on Saturday. (See link below)

Mexico's government cited that "white corn is of the utmost importance in the diet of Mexicans, with an annual per capita consumption of 346 kg, and it is the grain with the highest production in the country with an 88.2% participation in the national production of grains."

Citing supply and the need to "promote the strengthening national production, the internal market and the productive chain" of white corn, a 50% tariff on imports is needed. The tariff will run through the rest of 2023.

The move by Lopez Obrador will further strain the debate between the U.S. government and Mexico over corn. Lopez Obrador was moving for a ban on imports of white corn. In early June, U.S. Trade Representative Katherine Tai announced the United States has requested dispute settlement consultations with Mexico on "certain Mexican measures concerning products of agricultural biotechnology" under the United States-Mexico-Canada Agreement (USMCA).

USDA doesn't specifically track white corn production, but the Agricultural Marketing Service (AMS) cites white corn equals about 1% of total U.S. corn production. In the 2011-2016 timeframe, white corn production was estimated between 90.5 million bushels (mb) and 157 mb in 2011-2016 timeframe. Nebraska and Texas are cited are the two top states for producing white corn.

The publication Mexico Business News cited earlier this year that 18% to 20% of Mexico's corn imports from the U.S. are white corn. With 12 million metric tons (mmt) of total corn sales on the books in this marketing year, according to USDA, 20% would come to about 2.4 mmt, or just under 95 mb.

Despite each of Lopez Obrador's decrees and criticisms of imported corn, Mexico remains the top U.S. export destination for corn at more than 35% of all export sales.

Mexican tariff decree: https://www.dof.gob.mx/…

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

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