Mexico is implementing measures to slap hefty import duties on U.S. products valued at approximately US$3 billion.
RELATED:
Trump Taxes Biggest U.S. Trade Partners, So They Strike Back
The government of Mexico is making good on a promise to institute retaliatory sanctions in response to U.S. tariffs placed on steel and aluminum. Some of the goods targeted by Mexican authorities include cheese, pork and bourbon.
There will be a 20% tariff on U.S. pork, apples and potatoes and a slightly higher 20% to 25% tariffs on cheese and bourbon. Mexico's list of retaliatory duties is designed to hit states governed by senior Republicans.
"When we talk to farmers, a lot of them agree with the end goal, which is to rebalance tariffs that appear to be unfair. It really is unfair if we have a 2% tariff on cars from Germany and they have 20% tariffs on our cars," Dave Miller, director of research for the Iowa Farm Bureau, told NBC News.
"On the other hand, we'd also rather it not get done in a tariff-based war because no one wins at that," Miller added that Mexico might start importing pork from Brazil or Canada. U.S. pork farmers could lose up to US$100 million annually if Mexico goes through with the threat.
Mexico imported US$1 billion worth of some 650,000 metric tons of pork legs and shoulder last year, according to government data.
“When you have to compromise with a whole bunch of countries, you get the worst of the deals,” Kudlow said. “Why not get the best?... Canada is a whole lot different from Mexico.”
The announcement comes after U.S. President Donald Trump's months-long stance to end the North American Free Trade Agreement (NAFTA) talks and instead renegotiate one-on-one deals with Mexico and Canada – that complete the three-country group.
Amid the possible talks of implementing tariffs on U.S. products, Mexico will go to the polls in less than a month – July 1 – to select a new president. The outcome of the election could further affect the contentious NAFTA talks.
National Economic Council Director Larry Kudlow told media that Trump's preference now is to actually negotiate with Mexico and Canada separately.
“He prefers bilateral negotiations. NAFTA has kind of dragged on,” Kudlow added, saying “the president is not going to leave NAFTA. He is not going to withdraw from NAFTA. He’s just going to try a different approach.”
In another turn of events, China recently offered to buy tens of billions of dollars of U.S. agriculture, energy and manufacturing products to avoid U.S. tariffs, a senior administration official disclosed.
“If the numbers are accurate, an additional US$70 billion in U.S. exports to China would be considerable – a 50% increase in U.S. exports from 2017 levels,” Chad Bown, a senior fellow at the Peterson Institute for International Economics, said.
“Ongoing negotiations are a good sign and are certainly better than a tariff war.”
Trump insists that he is imposing tariffs to protect national security and jobs in the United States.