President Trump on Thursday (May 30) tweeted his plans to impose a 5% tariff on Mexican imports, effective June 10, and escalating until immigration from the country stops.

A White House statement said that if Mexico doesn’t act, the tariffs would rise to 10% on July 1, 15% on Aug. 1, 20% on Sept. 1 and reach a permanent level of 25% on Oct. 1.

The tariff threat has ag groups on edge as Mexico is a leading export market.

“At such a critical time for U.S. farmers, new talk of tariffs on Mexican products challenges the complex relationship we have with the top international buyer of U.S. grains and related products,” said the U.S. Grains Council.

The U.S. Wheat Associates and National Association of Wheat Growers say the tariff threat threatens to undermine approval of the U.S.-Mexico-Canada Agreement and puts wheat demand in Mexico at risk.

“The potential fallout from new tariffs is like struggling to survive a flood then getting hit by a tornado,” said Chris Kolstad, Chairman of USW and a wheat farmer from Ledger, Mont. 

“We call on the President to rescind this threat immediately,” said Ben Scholz, President of NAWG and a wheat farmer from Lavon, Tex. “We’ve been hit by low prices; we’ve been hit by rain and flooding that is hurting what was an excellent wheat crop; and now we’ve been hit again by the actions of our own government. We need to end indiscriminate use of tariffs now, one way or another.”

Related:Trump to impose 5% tariff on Mexican goods

Mexico was the top market for U.S. corn in 2017/2018, with corn and corn product exports valued at $3.3 billion. Corn exports to Mexico reached a record high of 15.7 million tons (618 million bushels), up nearly 13% from 2016/2017. Mexico was also the top buyer of U.S. distiller’s dried grains with solubles, purchasing 2.13 million tons in 2017/2018 – up 3% year-over-year.

“NCGA strongly urges the President to rethink applying new tariffs to Mexican goods and to reconsider using tariffs to address non-trade issues,” said National Corn Growers Association President Lynn Chrisp. “Mexico is the top customer for U.S. corn. Corn farmers want to continue working with the administration and Congress to ratify the new U.S.-Mexico-Canada Agreement and pursue new trade agreements. The recent deal to lift steel and aluminum tariffs on Mexico and Canada was an important breakthrough for USCMA but new tariffs threaten to reverse that progress. Amid a perfect storm of challenges in farm country, we cannot afford the uncertainty this action would bring.”

"We appeal to President Trump to reconsider plans to open a new trade dispute with Mexico,” said David Herring, National Pork Producers Council president. “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.”

Instead, Herring urged the president to move forward with the USMCA. U.S. pork producers have lost $12 per hog for most of the past year due to retaliatory tariffs imposed by Mexico after Trump imposed steel and aluminum tariffs on the country.

Trump’s action puts the USMCA at risk, an Iowa senator said.

Sen. Joni Ernst, R-Iowa, chairwoman of the Senate Agriculture Subcommittee on Rural Development and Energy, expressed concern that if Trump proceeds with the tariff, the chance of getting the USMCA through Congress “will be stifled.”

The National Grain and Feed Association and the North American Export Grain Association commended the Trump administration for forwarding the draft Statement of Administrative Action to Congress on May 30, which clears another procedural step to congressional consideration of the USMCA.

“But we are concerned about the prospect of the imposition of new U.S. tariffs against Mexico,” the two said in a joint media statement. “The imposition of such tariffs unquestionably will jeopardize ratification of this crucial trade accord that would bring about more normalized and predictable two-way trade with the United States’ top trading partners, which is vitally important to U.S. agriculture, the American economy and job creation, particularly given the current trade disruptions with China.”

The submission, which happened on the same day as the Mexican tariff threat was issued, begins a 30-day period after which the administration may submit the USMCA to be considered by Congress.

Source: White House, U.S. Grains Council, NAWG, U.S. Wheat Associates, Office of Sen. Joni Ernst, NPPC, NGFA, NAEGA, AFBF, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.