White House Wakes on Tariffs and Trucks

In March of 2009, the Mexican Economy Secretary issued a press release increasing tariffs on 89 U.S. exported products. Silence from the White House. A year and a half passes and now Congress is in recess and members are running for re-election in their home districts, when the Mexican Economy Secretary issues a press release increasing tariffs on an additional 10 U.S. products. The Mexican government is sending a reminder.

The message was heard loud and clear to all of the trade associations representing the growers and producers of the 99 listed products, even if the White House couldn’t hear it over the victory cries of their recently passed Healthcare overhaul. To the frustrated producers trying to get their goods to market in an already anemic economy, this meant jobs and for some, a huge haircut to the razor thin profit margin they operate under.

The bad trade blood stemmed over part of NAFTA, which ensured that Mexican Trucks could have access to U.S. roads, and the expiration of a pilot program which the trucks were operating under. In 2009, President Obama let this expire, and thus prohibited Mexican Trucks access to deliver goods across the border. Although the Mexican government requested the situation be addressed as a breach of NAFTA, the White House and the Department of Transportation was silent. Probably not so surprising considering the Teamsters Union had bent their ear and testified that Armageddon would approach and drug cartels would inherit the U.S., should they negotiate with Mexico.

This week the White House has broken its silence on the issue and has extended an olive branch to Mexico to reopen negotiations. Secretary LaHood is finally engaged and taking action and the producers are waiting with baited breath.

It has been almost two years since the first round of Mexican tariffs were announced. The estimated value of these import tariffs is about $2 billion. Which makes me wonder how many weeks of wages would $2 billion pay for? You have to assume that each private company in each sector of these 99 products had to lay off workers if their tariffs increased astronomically and the percentage of exports dropped by, in some cases 25%. The apple industry alone exports ¼ of all U.S.-grown apples to Mexico. If the White House had made it a priority to negotiate a treaty with Mexico a year ago, would 13 weeks of unemployment insurance, really be so necessary? Probably not if you worked in the production of any of 89, I mean 99 products, caught in the crosshairs.

Nicole Palya Wood
Legislative Director