retail news in context, analysis with attitude

CNBC reports that the Mexican government has decided to impose tariffs of up to 20 percent on US pork being exported to Mexico, in what it said was direct retaliation for the Trump Administration’s tariffs on Mexican steel being imported into the US.

According to the story, “Mexico also announced tariffs on several other agricultural products, including apples, potatoes and cheese as well as on American bourbon. The tariffs will amount to between 15 percent to 25 percent.

“Mexico's tariff on American pork applies to the animal's legs and shoulders. It also follows China slapping tariffs on U.S. pork earlier this year.”

It might not necessarily be a short-term negative for US consumers, however. If US pork is not being sent to Mexico, it could help create a glut in the US that would result in lower prices. Long-term, however, “pork executives say the industry could pull back on supplies in the next year or two if trade-restricting barriers force producers to start losing significant amounts of money. If that downsizing happens, they say it could ultimately lead to higher prices in the long term for American consumers.”
KC's View:
Not being an economist, I don’t have a strong feel for the tariff issue. But I’ve read a fair amount about the subject in recent days, and I must admit that I find the anti-tariff, free-trade voices to be more persuasive.

But we’ll have to see how this all turns out.