(UPDATED, June 7) Mexico has delivered on its promised tariffs on U.S. fresh apples, frozen potatoes and dried cranberries in response to the President Trump’s steel and aluminum tariffs.
Mexican President Enrique Peña Nieto released a decree in response to the U.S. tariffs on steel and aluminum. Effective June 5, Mexico hit U.S. apples, frozen potatoes, processed cranberries and many other U.S. manufactured goods with a 20% tariff, according to the document published in Mexico’s official gazette.
Blueberries and grapes, which were previously mentioned by Mexico as potential targets, were not listed in the June 5 document.
Trump imposed tariffs, effective June 1, of 25% on steel and 10% on aluminum from Mexico, Canada, and the European Union.
According to a news release from the government of Mexico, the decree suspends the preferential tariff treatment between the U.S. and Mexico and allows Mexico to put in place duties on a variety of products, including pork, some types of cheese, apples, cranberries, whiskey, steel and motor boats.
Canada’s list of retaliatory tariffs, set to go into effect July 1, includes U.S. fresh cucumbers but no other produce.
The European Union on June 6 published a list of U.S. imports subject to retaliatory tariffs, starting in July. Besides U.S. steel products, the list includes orange juice and cranberry juice concentrate and dried cranberries among many other items totaling trade value of $3.4 billion per year.
“Our position is that the U.S. cranberry industry strongly supports free trade and we do believe these additional tariffs, whether from China, EU or Mexico or wherever will be detrimental to the industry,” said Terry Humfeld, executive director of The Cranberry Institute, Carver, Mass. More than 30% of the U.S. cranberry crop is exported, he said.
The U.S. exports about $120 million per year in cranberry products to the EU, and Mexico buys more than $30 million in U.S. cranberry products. China’s market for U.S. cranberry products has grown from about $5 million five years ago to $45 million in 2017.
“We just hate to lose all that momentum and we are hoping all parties involved will sit down and reach and agreement that will allow us to continue to provide cranberries to (those markets),” Humfeld said. “It is difficult to be caught in the middle and we are hopeful it can get resolved soon.”
Industry concerns rise
Mexico is Washington’s top apple export market.
While 80% of the 2017 crop is sold, Todd Fryhover, president of the Washington Apple Commission, Yakima, Wash., said the tariff is a problem if it persists.
“We need to look ahead to the next crop and have a quick resolution to this,” he said June 5.
The inclusion of frozen potatoes in the skirmish over steel tariffs wasn’t a shock since Mexico also targeted frozen potatoes in the 2009-2011 dispute over Mexican truck access in the U.S., said Kam Quarles, vice president of public policy for the National Potato Council.
The NPC is working on letting U.S. policymakers how important Canada and Mexico are to the potato industry, he said, noting that U.S. exporters send tens of millions of dollars worth of frozen potatoes to Mexico every year.
Ongoing North American Free Trade Agreement talks are key to a solution, he said.
Quarles said the NPC is hopeful the tariffs are a negotiating tactic that will soon be taken down soon.
“Hopefully, cooler heads prevail,” he said.