By Landee Kieschnick
TFB Communications Intern
If President Donald Trump imposes a tariff on Mexican goods, which he has mentioned as a possibility, the U.S. could see significant economic impacts.
In response to Trump’s talks of a 20 percent tariff to pay for the border wall, Mexican Senator Armando Rios Piter said he plans to introduce a bill to stop buying corn from the U.S. and shift those purchases to Brazil and Argentina.
Mexico is currently the third largest trading partner for the U.S. with annual trade worth about $18.5 billion.
Piter reported that Mexico plans to travel to South American countries within the next 20 days to look at quotas and changes to tariffs to facilitate more imports from those countries.
The goal is to decrease Mexico’s reliance on the U.S. for its agricultural products due to the talk of tariffs on goods they sell to the U.S.
And Piter’s intentions are making Texas and American farmers nervous.
“Texas is uniquely situated right along the border. So any talk of having a trade war or retaliation is very concerning because it could have a very large effect on Texas farmers and ranchers,” Regan Beck, Texas Farm Bureau director of Government Affairs, said.
Corn is an essential commodity in the American farm economy and one of the leading exports from the U.S. to Mexico.
In 2015, American farmers sent $2.4 billion of corn to Mexico.
In 1994, the first year for the North American Free Trade Agreement (NAFTA), corn exports to Mexico were only $391 million.
“Since then until now, our trade with the rest of the world has tripled. However, for Canada and Mexico, which we’ve operated with under NAFTA, trade has quadrupled,” Beck said. “So you can see that there’s a significant gain in our trade relationship between the countries by having NAFTA in place.”
Corn, beef, poultry, grain sorghum and forestry products are major U.S. crops sent to Mexico, Beck noted. Each commodity could be affected by any trade retaliation between the countries.
A loss of the Mexican market would push down prices for U.S. corn.
For U.S. farmers dealing with a fourth consecutive year of declining net farm income, trade negotiations are needed to boost revenue.
“Trade is important for all our Texas commodity prices, farm markets and farmers and ranchers to be profitable,” Beck said. “Texas Farm Bureau will be working diligently to make sure those markets stay open.”
I would be interested in Mr. Beck’s take on what the net effect would be with Mexico’s exports to the US also being affected.
I’ve read where Mexico is very dependent on the US, perhaps more so than the US depends on them.
It would seem any trade disruptions would negatively impact them as well.
I think that the articles since President Trump has won office should have been fact checked before they were published to people who might not understand how biased some of America is. I can honestly say I am ashamed of Farm Bureau for promoting untrue information. Please remember that over 50% of America supports our President and daily people are converting from Democrat to Republican due to all the misinformation and ridiculous behavior by about 1/4 of our great nation. I believe that you will find that within the next 30-60 days, over 75% of Americans will be supporting our president regardless of all the lies that are being published and all the companies who don’t remain neutral will find they have lost valuable business over this.
I see no information on the trade inbalance coming into the US from Mexico and why does securing our borders give cause for retaliation from Mexico? Hypocritical at best, partisan politics at its worst.
We need the wall either way.
Very little corn is produced in Texas and the other border states that bear the brunt of the immigration issues. Those poor corn producers in the Midwest that have been propped up by ethanol subsidies for the past 8 years are starting to see the end of that, and now they are looking for another government handout. Quit your whining and accept the supply and demand price that corn brings, without blaming it on Trump.
As publisher of these spaces, I’ve reviewed the responses and stand on the facts represented in this article. Clearly, this is no attack on anyone, but rather an attempt to present all the facts in a complex trade issue. For us, it’s never about personalities. It’s about issues.
We have spoken favorably about many of President Trumps initiatives. For example, we enthusiastically supported his naming Scott Pruitt as head of EPA (http://media.texasfarmbureau.org/texas-farmers-and-ranchers-celebrate-pruitt-to-epa/) and publically supported his executive order to send the badly conceived Waters of the U.S. rule back to the drawing board (http://texasfarmbureau.org/trump-executive-order-ditches-wotus/). Farm Bureau also supports many of his energy initiatives. We are certain we’ll have many opportunities to work with the administration.
With most commodity markets in shambles right now, there is little doubt that disruptions in trade will have additional damaging effects. Since our policy is developed by farmers and ranchers, writing about their views on these pages is our obligation. This is a good discussion. Thanks to all for contributing.
Texas produces in the neighborhood of 300 million bushels of corn annually – enough to rank 13th overall http://beef2live.com/story-states-produce-corn-0-107129 Mexico gets a lot of it.
Gene Hall hits the nail squarely on the head. Slaying the messenger for simply presenting the information in what appeared to be a well-written informative piece is just wrongheaded, folks. The Wall Street Journal recently did a long piece on what the affects of a trade war with Mexico could have on the cotton producers across Texas and elsewhere. Texas A&M University weighed in last week with an informative piece on the trade dollars and jobs that are at risk if the ongoing dialogue further deteriorates. To quote Mexican politicians seems like the kind of information we need on this side of the river. They do have the same rights to buy from whomever they wish – whether it’s corn or cotton, hogs or cattle as well as tractors and other farm equipment. Let’s take a deep breath and work together, certainly with our neighbors to the south, but with each other, as well. I, for one, thought it the kind of information farm bureau should be providing to its membership and I thank you for a job well done.