Cross-Border Trucking: Manufacturers Face Additional Mexican Tariffs

By August 16, 2010Infrastructure, Trade

Mexico’s minister for the economy, Bruno Ferrari, has just announced the Mexican government will be adding to its list of U.S. products subject to retaliatory tariffs resulting from the United States’ failure to address the cross-border trucking dispute. While the exact products and changes aren’t official and won’t be for several days, the basic issue here is unchanged: The United States has violated the terms of a trade agreement, NAFTA, and thousands of U.S. manufacturing jobs are at risk because the Administration and Congress won’t take the necessary steps to put us in compliance.

President Obama and President Calderon met back in May and discussed this issue. I am certain at that time that President Calderon told Mr. Obama that, if this issue were not resolved in a timely fashion, additional tariff retaliation would be forthcoming. Now, almost two months later, we see that the retaliation is here. More manufacturing and farm products will be added to the list, which already impacts billions in dollars in U.S. exports. Some products will come also off the list — but the very fact that we are facing retaliation on American manufacturing firms and their exports is unacceptable. This issue can be resolved through careful cooperation between the Administration and Congress, and between the United States and Mexico. Transportation Secretary LaHood told Sen. Patty Murray (D-WA) more than two months ago that a solution was “closer than soon.” The only thing “closer than soon” now is additional tariff retaliation on more U.S. manufacturing.

Some of those manufacturers have already shut down U.S. assembly lines and moved their production to Canada, Mexico or other countries – exporting jobs instead of products. Others are still paying the tariffs to maintain their market share in Mexico – money that could be far better spent on creating new jobs, increasing investment in their business, or expanding to other markets. Many of those manufacturers have indicated that, 15 months after the tariffs were first imposed, they will now begin to shut down U.S. production rather than continue to pay the tariffs –- so we can expect the pain to spread from their bottom line to the unemployment line.

It doesn’t have to be like this. There is no reason under the sun why we continue to face the tariff retaliation we’ve faced since 2009 — and certainly no reason for facing additional products being targeted. This new action should spur to Congress and the Administration to turn to negotiations and a solution as soon as the August recess ends. Manufacturing wants to double exports, increase jobs, and lead the economic recovery. Pursuing policies that do the opposite by leaving trade disputes unsettled are the wrong road to travel.

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