No Surprise: Mexico Slaps Tariffs on U.S. Goods Over Truck Dispute

By March 18, 2009Trade

From Bloomberg:

March 18 (Bloomberg) — Mexico will apply tariffs of 10 percent to 45 percent on at least 90 products from the U.S. in retaliation for the U.S. scrapping a test program allowing Mexican trucks to deliver goods beyond a U.S. border zone.

The products include some fruit and vegetables, wine, juices and sunglasses, according to the online version of the State Gazette. Most tariffs are 10 percent to 20 percent, with unspecified fresh products subject to a 45 percent tariff. The tariffs, which will apply to $2.4 billion of goods, take effect tomorrow, Economy Minister Gerardo Ruiz Mateos said yesterday.

Talks to diffuse the first trade spat of President Barack Obama’s administration can’t begin until the U.S. has a Commerce Secretary, Ruiz Mateos said. Discussions to resolve the dispute will start once his counterpart is ratified, he said. Ruiz Mateos said that the trade dispute with the U.S. is hurting the region and giving an advantage to other parts of the world.

“We’re waiting to begin work,” Ruiz Mateos said. “Unfortunately, the U.S. Senate hasn’t designated our counterparts yet.”

The list of goods is here, in Spanish. We’ll post the English version as soon as it’s available. [UPDATE: Here it is.] Most do seem to be agricultural products, but there are plenty of manufactured goods too: “Rotuladores y marcadores con punta de fieltro u otra punta porosa.” Take that, Congress says to U.S. felt-tipped pen manufacturers.

Congress killed the border truck program in the omnibus appropriations bill, signed into law by President Obama.

Columnist Charles Krauthammer assessed the provisions in comments yesterday on Fox News:

There are over 6.5 million trucks in the United States. This program allows 98 Mexican trucks to roam among them. And over that, they are willing to risk a trade war with Mexico.

If you wanted to do protectionism, do it competently. Go the full Smoot-Hawley. But over 98 to enrage Mexico, to threaten to destroy NAFTA, and to show the world that the American Congress is willing to impose protectionism over trivialities at a time when the economy is hanging by a thread, where every other country is looking to see if American is going to turn protectionist.

In an editorial, the National Review notes exports to Mexico have already fallen 17.5 year-to-year, and, “The tariffs would deliver another crushing blow to exporters at the worst possible time. “

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