Lifted Tariffs Expedite USMCA Implementation


By Kayla Sargent

 

In a multi-front trade war, many major moves were made last week, all of which have an affect on agricultural markets.  Last Friday, President Trump decided to lift tariffs on steel and aluminum from Mexico and Canada, a move that could expedite ratification of the North American Free Trade Agreement replacement, now known as the United States Mexico Canada Agreement (USMCA).  As the trade war escalates with China, this negotiation was welcome news to U.S. agricultural organizations.

When the steel and aluminum tariffs were put into place last year, Mexico responded with retaliatory tariffs on a variety of agricultural products including pork and dairy. Mexico is the largest importer of U.S. pork in volume.  After last week’s agreement, Mexico has agreed to lift the retaliatory tariffs as well.

“We thank the Administration for ending a trade dispute that has placed enormous financial strain on American pork producers.  Mexico’s 20 percent retaliatory tariff on U.S. pork has cost our producers $12 per animal, or $1.5 billion on an annualized, industry-wide basis,” National Pork Producers Council (NPPC) President David Herring said.  “Removing the metal tariffs restores zero-tariff trade to U.S. pork’s largest export market and allows NPPC to focus on working toward ramification of the USMCA, which preserves zero-tariff trade for U.S. pork in North America.”

American Farm Bureau Federation also called the announcement “welcome news” and hopes it will “pave the way for approval of the USMCA by Congress.”

National Cattlemen’s Beef Association (NCBA) has been lobbying for swift passage of the USMCA and said removing the metal tariffs “opens the door” to ratify the deal.  NCBA strongly supports the USMCA and urged Congress to work with the President to ratify it as soon as possible.

Since Friday’s announcement, both Canada and Mexico officials have said they are prepared to work together to quickly pass the USMCA.  Vice President Mike Pence announced that he would be in Canada on May 30 to discuss “advancing” ratification.

Swift ratification “would help the beef business, if we fix some of the old NAFTA problems,” Montana Stockgrowers Association (MSGA) President Fred Wacker said.  His organization supports the labeling of USA beef.

“If the USMCA allows us to have a COOL (Country of origin labeling) program, then we need to take a hard look at that, but fix the old COOL” Wacker said.

He urged caution against labeling Canada or Mexico’s beef, or any other country for that matter. Instead, Wacker said, the focus should be on U.S. beef.

“We need to stop trying to label everyone else’s product — it’s not legal. We need to focus on our own,” he said.  Wacker said he is encouraged by the number of voluntary U.S. origin labels he has recently spotted in grocery store aisles.

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