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Trade War With Mexico – Is It Good Business?

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Touch the Soil News #603 (feature photo CC SA 3.0)

In 2015, the U.S. imported $295 billion in products from Mexico. That same year, Mexico imported 267 billion in products from the USA. The U.S. presidential administration is touting that it is going to put a 20 percent import tax on stuff that comes from Mexico.

So what if Mexico retaliates and puts a 20 percent tariff on goods coming from the USA? Does it make sense for Americans to pay an additional $59 billion on what it buys from Mexico? Does it make sense for Mexicans to pay an additional $53.4 billion on what it buys from the U.S.?

If each side put up a 20 percent import tax, consumers on both sides of the border would be slammed with an additional $112 billion for the same products. The difference between what Mexico imports from the U.S. and what the U.S. imports from Mexico is only 9 percent ($28 billion). What sense would it make to punish consumers on both sides of the border with an additional cost of $112 billion while the squabble is only over $28 billion?

Tom Stenzel, President and CEO of United Fresh Produce Association here in the U.S. warns that a 20 percent hike on food products such as bananas, mangoes and other fresh produce – that can’t be raised economically in the U.S. – is not good for American consumers.

Following is a short video discussion on a possible 20 percent import tax on products from Mexico:

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