Ag Policy Blog

Reaction to Proposed Border Tax, Immigration Orders

Jerry Hagstrom
By  Jerry Hagstrom , DTN Political Correspondent

United Fresh Produce Association President and CEO Tom Stenzel was among those on Thursday expressing concern over the Trump administration pitch to tax imports from countries with which the U.S. has a trade deficit, like Mexico.

“It is very troubling for world food and agricultural markets for administration spokespersons to bandy about terms like a 20% tax on all imports from Mexico or other countries.“

“The United States both exports and imports a very large amount of foods and agricultural products, and is dependent on fair and open markets,” Stenzel said. “The U.S. has laws and trade agreements in place that do not allow any administration to unilaterally start adding these types of tariffs.

“But, if the administration does choose to renegotiate trade agreements and ask Congress to work toward imposing such a tariff on foods, we risk provoking a trade war that would harm both American agricultural producers and consumers. Consider the impact on American consumers of a 20% hike in the cost of foods such as bananas, mangoes and other products that we simply can’t grow in the United States. And, consider what other countries would do to block U.S. exports in retaliation.

“As the administration looks to incentivize manufacturing jobs in the U.S., we urge President Trump to consider the unique nature of food and not place a new ‘food tax’ on American consumers,” Stenzel said.

Stenzel was reacting to a proposal by Trump administration to impose a new tax on Mexican exports. But spokesman Sean Spicer said it would be part of a broader plan to tax imports from countries with which the United States has a trade deficit, like Mexico.

“If you tax that $50 billion at 20 percent of imports — which is by the way a practice that 160 other countries do — right now our country’s policy is to tax exports and let imports flow freely in, which is ridiculous,” Spicer told reporters. “By doing it that we can do $10 billion a year and easily pay for the wall just through that mechanism alone. That’s really going to provide the funding.”

Such an import tax would presumably apply to agricultural products, including fruits and vegetables that are staples in U.S. grocery stores.

Mexico is the largest exporter of food products to the U.S., projected at $22 billion this year. Roughly $10.6 billion of that volume are fresh fruit and vegetables as well as processed fruit and vegetables. The U.S. food industry also spends an average of about $4 billion a year in direct foreign investment in Mexico for production and processing facilities.

The Agriculture Department’s Foreign Agricultural Service website notes, “Under the North American Free Trade Agreement (NAFTA), Mexico and the United States have eliminated all tariffs and quantitative restrictions on agricultural goods and have strengthened scientific ties to eradicate diseases and pests, conduct research and enhance conservation.”

Trump this week signed an executive order indicating his intent to cancel NAFTA and negotiate bilateral trade agreements with Mexico and Canada.

Meanwhile, the United Farm Workers asked who will perform all kinds of jobs in the United States if Trump actually follows through on his proposals to build a wall and also aggressively increase deportations of people currently living in the U.S. illegally.

“U.S. Department of Labor surveys show the majority of U.S. farm workers are undocumented. The United Farm Workers’ anecdotal experience in California and other states where we are active shows the percentage of undocumented workers is even higher," said United Farm Workers President Arturo Rodriguez. He added, “So if today’s executive orders from Donald Trump signal the beginning of fulfilling his oft-repeated campaign pledge to deport the undocumented, then who is going to feed America? Who is going to feed the guests at Trump hotels and golf courses? Who is going to feed Donald Trump?”

Follow me on Twitter @Hagstromreport


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