Mexico to Revise List of U.S. Goods Subject to Tariffs in Trucking Dispute
The government of Mexico announced Aug. 16 that it plans to release later this week a revised list of U.S. goods subject to tariffs when imported into Mexico. These duties were first imposed in March 2009 in retaliation for the U.S. Congress’ termination of a pilot project aimed at helping to resolve a long-running dispute over the U.S. failure to implement the cross-border trucking provisions of NAFTA.
According to Economy Secretary Bruno Ferrari, Mexico will remove 16 U.S. products from the list of 89 that are currently subject to tariffs of 10-45% and add 26, for a net gain of 10. A Reuters article cited one unnamed Mexican official as stating that peanuts, telephone equipment, metal furniture, certain textiles and paper products, locks and some carpets are among the products expected to be dropped from the retaliation list. Other press sources indicate that certain pork, oranges, grapefruit, apples, corn, pistachios, chewing gum, cheese, ketchup and chocolate are likely to be added. Products that will continue to be subject to the retaliatory duties include Christmas trees; certain fruits, vegetables and juices; health and beauty items; tableware, kitchenware and glassware; jewelry; home appliances; sunglasses; and pens and pencils. The total amount of trade affected by the sanctions is expected to increase only slightly, from $2.4 billion to $2.5 billion, while the number of U.S. states affected will rise from 40 to 43. Just over half of the updated list is expected to be composed of agricultural items.
Mexican officials said the objective of revising the list is to increase pressure on the U.S. to submit a formal proposal to resolve the trucking dispute. Businesses and organizations affected by the sanctions, and the lawmakers that represent them, have been calling on the Obama administration to take such a step for the last 18 months, but there has been little apparent progress despite regular assurances from administration officials that a plan is being developed. Observers say that is likely due in part to the fact that the White House has had higher priorities, such as health care and financial reform, in which it needed the support of those who oppose allowing Mexican trucks expanded access to U.S. highways. Now, however, the administration is making the expansion of exports a major part of its effort to increase domestic employment and economic growth, and Mexico’s move this week appears to play off the expectation that resolving the trucking dispute would provide a rapid and substantial increase in exports to a major trading partner where affected U.S. companies have been losing market share.
Obama administration officials reacted to the Mexican announcement with disappointment but offered no details on when a proposal might be forthcoming or what it might entail. U.S. Trade Representative Ron Kirk said only that he and Transportation Secretary Ray LaHood “are committed to continuing to work with Members of Congress and our counterparts in Mexico to resolve the dispute and end these duties.”