It has been reported that President Trump said today – the U.S. and Mexico have a “good chance” of striking a deal on immigration that will involve increased Mexican purchases of U.S. agricultural products.

However, if a deal does not materialize by Monday, all Mexican imports will be subject to a 5% tariff.

Mexican newspaper outlets have reported that the Foreign Trade Commission of Mexico (COCEX) finalized a list of retaliatory tariffs for President Lopez Obrador to use if President Trump moves forward with his proposal to levy 5% tariffs on all Mexican products. The measure was approved unanimously by COCEX and provides Mexico with the ability the react immediately.

Below is a link to the article in Spanish and a translation in English.

 

 

https://nortedigital.mx/mexico-responderia-con-decreto-de-represalias-por-aranceles-contra-eu/

By Salvador Esparza García |12:39 pm June 7, 2019

In reaction to President Donald Trump’s announcement to impose a 5 percent general tariff each month on products imported from Mexico to the United States as of next Monday, as a sanction for irregular immigration, the Mexican government is analyzing the possibility of imposing similar measures, but to those products originated in states of the American Union that are governed by the republican party.

For this reason, the Foreign Trade Commission of Mexico (Cocex) presented to the Presidency of the Republic a series of reactions under the commercial threat of the neighboring country.

La Cocex is a technical consulting body made up of the Secretariats of Economy, Finance and Public Credit, Agriculture, Livestock, Rural Development, Fisheries and Food, Environment and Natural Resources, Health, Foreign Affairs, Bank of Mexico and Cofece.

The Ministry of Economy has said that a first analysis of the inflationary economic impact would be approximately 348 billion dollars.

Likewise, it was considered that as a reaction to the threat of the United States, a “decree of reprisals” was issued under the following arguments:

The economic impact was studied according to the aforementioned figures.
The measure was studied with the purpose of not impacting the value chains.
The feasibility of reacting under the provisions of article 131 of the CPEUM was observed.
The US measure against Mexico violates the provisions of Article 302 of the NAFTA.
It was decided to measure a decree of reprisals that was in accordance with the most favored nation clause (MFN) of the World Trade Organization (WTO).

The foregoing with the purpose of avoiding an international panel before such organism (some cases have been studied about and cases of state responsibility could be excluded only in cases of extreme emergency).

Products that would be taxed

Cocex presented a draft decree of reprisals, which includes the tariff increase for various products originating in the United States, among which are beef, pork, apples, grapes, pears, fresh cheese, and cut beef. , without slicing, fresh boned, frozen or frozen, hams, potatoes, butter, ice cream even with cocoa, malt beer, some beauty products, all of these with a tariff ranging from a minimum of 25%, others of 45% and up to 75%

The selected products are from republican states (apple, beef, bacon, pork, fresh cheese, beer, grapes, all at a 25% tariff), and impose a 75% tariff on turkey. Steel, aluminum and whiskey were excluded, the latter because it already has a 0% tariff).

The measure was approved unanimously in Cocex. If the US announcement becomes official, Mexico will be able to react immediately. The entry into force of the measure will be the day after its publication in the DOF.

Likewise, it was stated that if the United States makes such a measure effective, and in its case continues with the progressive and permanent increase of the tariff increase month after month, Mexico intends to increase the tariff fractions or increase the tariffs to those already included in the tariffs. the list.

Reacts Borderplex Alliance; asks to reconsider the tariff threat against Mexico

Through a statement, Jon Barela, CEO of the Borderplex Alliance (which focuses on the economic development of the Juarez-El Paso-New Mexico region), expressed his disagreement after the delegations of Mexico and Mexico made the first round of negotiations. The United States did not reach an agreement on the imposition of tariffs.

Jon Barela said he was “disappointed, because the negotiators failed to reach an agreement on the wrong and ill-conceived threat of imposing tariffs on Mexican products. Just yesterday, I had a frank but cordial discussion with the White House to address this issue. ”

“We all want a secure border, but placing tariffs on Mexican goods will be counterproductive, create economic uncertainty, hurt US consumers and lead to significant job losses. As the June 10 deadline draws near, we strongly urge the (US) administration to reconsider its tariff threat. “