American farmers, cheesemakers call on President Trump to suspend tariffs on Mexican products while NAFTA talks continue
Mexico’s retaliatory tariffs would harm U.S. dairy’s trade with its largest and most reliable market.
More than 60 companies and organizations representing American dairy farmers and cheesemakers commended President Trump on June 26 for his efforts on equitable trade and for insisting that Canada halt its “market-distorting” dairy practices, according to a press release issued jointly by the U.S. Dairy Export Council (USDEC), the National Milk Producers Federation (NMPF) and the International Dairy Foods Association (IDFA). At the same time, the companies urged the administration to reconsider its imposition of new tariffs on Mexico — in light of that country’s constructive engagement in North American Free Trade Agreement (NAFTA) negotiations and the harm that Mexico’s retaliatory tariffs would have on U.S. dairy’s trade with its largest and most reliable market.
In retaliation for U.S. actions on steel and aluminum imports, Mexico recently added new tariffs — some of which will reach as high as 25% in July — on American-made cheeses, among other products, the dairy organizations said. These tariffs will diminish demand for high-quality dairy products that are produced across the United States.
The production of cheese and other dairy products in the United States supports almost 3 million American jobs. The additional Mexican duties also will allow the European Union, which recently signed a bilateral free trade agreement with Mexico, to take hard-earned market share from American dairy companies, the organizations said.
In their letter to President Trump, the 60-plus companies asked the administration to work collaboratively with Mexico and suspend the steel and aluminum tariffs on Mexican products until the negotiations for a modernized NAFTA have been concluded.
Mexico has been a model for open dairy trade with the United States, USDEC, NMPF and IDFA said. Through investment and cooperation, the United States has become Mexico’s biggest dairy supplier, with cheese purchases last year totaling nearly $400 million. Today, Mexico accounts for about one-quarter of all U.S. dairy exports. Until the tariffs were imposed, all U.S. dairy products enjoyed duty-free access into the Mexican market.
USDEC, IDFA and NMPF said they strongly support the goals set forth in the letter to President Trump.
“Our first four months of 2018 showed a strong expansion in the volume of U.S. dairy exports into Mexico,” said Tom Vilsack, president and CEO of Arlington, Va.-based USDEC. “But these tariffs have introduced uncertainty and concern. A renegotiated NAFTA 2.0 would go a long way toward restoring our industry’s momentum.”
Michael Dykes, D.V.M., president and CEO of Washington, D.C.-based IDFA said that maintaining dairy market access in Mexico is IDFA’s No. 1 priority in the NAFTA-related efforts, as duty-free access has allowed trade between the United States and Mexico to flourish.
“We’re confident that the administration and U.S. negotiators will find a way to preserve this vital partnership,” he said, “which allows the U.S. dairy industry to create more jobs and drive our economy.”
Jim Mulhern, president and CEO of NMPF, Arlington, Va., noted that dairy futures markets and the farm-level milk price outlook for the remainder of 2018 have deteriorated since their rise in the spring.
“No one wants to see lasting damage to our farmers result from lost access to our top foreign market. That’s why resumption of tariff-free trade between the U.S. and Mexico is so critical,” he said.
Read the letter here.