The United States – Mexico – Canada Agreement (USMCA) has been sitting in the wings for several months now. With President Trump removing Section 232 tariffs on steel and aluminum, both countries have started to ratify the agreement. However, as Mexico begins the process, President Trump announces new tariffs against them.
Audio: World of Agriculture
On Thursday, President Trump announced a new five percent tariff on Mexican goods. The President said this tariff was being put in place until, “such time as illegal migrants coming through Mexico to our country stop.” The President has said the tariffs could increase to 25% by October.
This is not giving Mexico any chance to react to the announcement. In fact, they have less than 10 days to try and satisfy the terms. This could put ratification of the USMCA agreement in jeopardy. The White House hasn’t even brought the agreement to the Congress for Ratification. While House Democrats have concerns over enforcement, labor, and the environment, both sides of the aisle in both houses agreed the Section 232 tariffs needed to go. Iowa Senator Chuck Grassley told President Trump to not bother sending the agreement to Congress until the tariffs came off.
In reaction to the new tariffs, Senator Grassley said:
“Trade policy and border security are separate issues. This is a misuse of presidential tariff authority and counter to congressional intent. Following through on this threat would seriously jeopardize passage of USMCA, a central campaign pledge of President Trump’s and what could be a big victory for the country. President Trump should consider alternatives, such as imposing a fee on the billions of dollars of remittances that annually leave the United States to Mexico, which only encourage illegal immigration and don’t help the U.S. economy. It could fund border security measures and would put economic pressure on Mexico without imposing a financial burden on U.S. consumers or harming American jobs. I’ve long supported reforms to remittance law, which haven’t become law because of opposition from big banks and other financial interests. Mexico must help get the border crisis under control and the president should use appropriate authorities to apply pressure. I’ve also called for a Safe Third Country Agreement so that Mexico cannot simply pass the buck to the United States. Mexico has a leading role to play here when asylum seekers are traversing their country without regard to the law and without consequence. Congress must also immediately fully fund border security and interior enforcement. Democrats should come to the table in a reasonable way and work to put an end to the security and humanitarian crisis on the border. I support nearly every one of President Trump’s immigration policies, but this is not one of them. I urge the president to consider other options.”
Senator Joni Ernst also stated this is not the way to fix the border security issue:
“It’s clear that we need to address the unprecedented flow of illegal immigrants coming across our border day in and day out, and it’s imperative that Mexico step up and do its part to stop the stream of these migrants. That being said, the livelihoods of Iowa farmers and producers are at stake. The USMCA would provide much-needed certainty to our agriculture community, at a time when they need it. If the president goes through with this, I’m afraid progress to get this trade agreement across the finish line will be stifled. While I support the need for comprehensive border security and a permanent fix to illegal immigration, this isn’t the right path forward. I’m asking the president to reconsider, and for Democrats to work with us to find a solution to the humanitarian crisis at our southern border.”
National Pork Producers Council President David Herring put out the following statement:
“We appeal to President Trump to reconsider plans to open a new trade dispute with Mexico. American pork producers cannot afford retaliatory tariffs from its largest export market, tariffs which Mexico will surely implement. Over the last year, trade disputes with Mexico and China have cost hard-working U.S. pork producers and their families approximately $2.5 billion.
“Let’s move forward with ratification of the United States-Mexico-Canada trade agreement, preserving zero-tariff pork trade in North America for the long term; complete a trade agreement with Japan; and resolve the trade dispute with China, where U.S. pork has a historic opportunity to dramatically expand exports given the countries struggle with African swine fever.
“We hope those members of Congress who are working to restrict the administration’s trade relief programs take note. While these programs provide only partial relief to the damage trade retaliation has exacted on U.S. agriculture, they are desperately needed. We need the full participation of all organizations involved in the U.S. pork supply chain for these programs to deliver their intended benefits.”
What the next steps will be, is still a big question mark. Will Congress get involved? What will the future of the USMCA be now? Only time is going to tell on this one.