The Teamster Tariffs

An 18-month trade war between the U.S. and its third largest trading partner took a turn for the worse this week when Mexico announced new tariffs on 26 previously tariff-free items that it imports from America. Washington state apples and California oranges and pistachios, among other things, will now cost 20% more in Mexico than they did last week. Cheeses from California and Wisconsin now face a 25% tariff. Though Mexico removed 16 items from the tariff list, the additions mean a net increase of 10 new U.S. exports facing Mexican duties and raise the value of the exports hit to $2.6 billion from $2.4 billion. The list of 99 items was released Wednesday and went into effect Thursday. This is bad news for U.S. producers whose goods compete with exports from countries like Canada and Chile, which have free trade agreements with Mexico. It is a wound that the fragile and export-dependent U.S. economic recovery can ill afford. It is also self-inflicted. Under the 1993 North American Free Trade Agreement (Nafta), goods and services are supposed to flow largely tariff-free across the Mexican, U.S. and Canadian borders. But the U.S. hasn't kept its side of the bargain, refusing for 15 years to allow Mexican trucking companies to compete on American soil. esident Clinton first yielded to pressure from the International Brotherhood of Teamsters to block Mexican trucks in 1995. Mexico pursued fruitless negotiations for five years, finally winning an appeal to a Nafta resolution panel in 2001. The Bush Administration promised to respect the panel's ruling but it waited until 2007 to launch a pilot program to allow a limited number of Mexican long-haul trucks into the U.S. and test their safety. The program demonstrated that Mexican trucks are as safe as their U.S. counterparts. But that didn't matter to Congressional Democrats who killed the pilot program in 2009...more