U.S. food manufacturers and trucking companies are trying to quickly move product into Mexico in case trade relations between the two countries break down after President Trump promised to renege on the North American Free Trade Agreement, says Reuters. The President has also said he is might push for a 20 percent tax on Mexican imports in order to pay for a U.S.-Mexico border wall.
Many large-scale food companies have come out in favor of NAFTA and trade with Mexico, which is one of the top three destinations for U.S. farm products. “Last week, more than 130 trade associations and food companies, including Cargill Inc. and Tyson Foods Inc., touted the benefits of NAFTA in a letter to Trump on trade,” says Reuters.
If Trump follows through on his threats, Mexico has ways to retaliate, starting with imposing tariffs of its own, especially on products that come from rural states that voted for Trump.
“In 2009 and 2010, Mexico put tariffs on 99 American exports in retaliation when Washington blocked Mexican trucks from using U.S. highways,” says Reuters. “The strategy targeted products seen as important to specific U.S. regions, including Christmas trees, apples and frozen sweet corn, to maximize political pressure. The dispute cost U.S. businesses over $2 billion and cut U.S. exports to Mexico of affected agricultural commodities by 27 percent.”