Texas agricultural commodities such as shelled peanuts and cheeses were among the latest to make the updated list of tariffs imposed by Mexico.
Congress' decision to discontinue the U.S.-Mexico Cross-Border Transportation Pilot Project led to the latest round of tariff-imposed commodities by the Mexican government.
The pilot transportation project allowed up to 100 firms from both countries to transport international cargo across the border without restriction, said Dr. Parr Rosson, a Texas AgriLife Extension Service economist.
The updated commodity tariffs will place further pressure on U.S. job creation and farm income, Rosson said.
“What's a concern now is the addition of pork, ham shoulders (bone-in), cheeses and some fruits – oranges, apples and grapefruit," Rosson said. "Mexico is our No. 3 export market right behind Canada and China. Businesses have worked really hard to develop relationships and this comes at a time when we need to be creating jobs rather than destroying them and putting downward pressure on prices."
North American Free Trade Agreement stipulates that countries must allow free and open access to transport goods across North American borders. When a country fails to comply, another country may file a case contesting the alleged infraction, Rosson said.
Mexico filed a petition, and it was granted, he said.
"Mexico agreed to withhold tariffs as long as we had a pilot program, and they held off for several months," Rosson said.
The good news, according to Rosson, is that beef and all major grains were left off the tariff list, but the issue will require close watch by those in the agriculture industry.
Another factor to be considered is that it will lead to higher prices for Mexican consumers.
"This will have a double-negative impact if this is sustained for a period of time," Rosson said. "This has been in discussion for more than a year now, and it hasn’t been resolved."
Not only will U.S. exports and prices decline due to higher tariffs, but also due to lack of purchasing power by Mexican consumers, Rosson said.