Mexico announced new tariffs on u.s. products in response to Donald Trump’s decision to impose steep tariffs on imports of steel and aluminum.
The list includes whisky, cheese, steel, bourbon and pork.
Analysts say that the rates are designed for US to hit Republican strongholds of the front of the mid-term elections in November.
Mr. Trump, last week imposed tariffs on steel and aluminum, and imports from Mexico, Canada and the European Union, riling the major allies of the united states.
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The movement was also dismayed to see some of the national companies, including pork producers, who now face a 20% tariff on the export of leg and shoulder for Mexico.
Mexico is the largest market for US pork exporters.
The other products affected by the new tariffs include apples and potatoes. Some cheeses and bourbon will be hit with 20% to 25% of customs duties.
Mexico – a net importer of US steel – is also putting 25% tariffs on a range of U.s. steel products.Political Dimension?
The potential economic impact on U.S. exporters could be damaging to Republican in anticipation of the November mid-term exams.
In Iowa, the top pork-producing state in the united states, with Mexico, its largest market, Republican Congressman Rod Blum is regarded as vulnerable.
“We need the trade and one of the things that concern us is the long-term consequences that these trade issues on our partnerships with Mexico and Canada and other markets”, Iowa, Secretary of Agriculture Mike Naig, a Republican, was quoted as saying by the Reuters news agency.
“If our clients across the world begin to travel to other parts of the world for their supplies, it is a serious problem,” he said.
The renewed trade dispute between the us and Mexico, comes amid heavy attempts to renegotiate the billion-dollar North American Free trade Agreement (Nafta).
The agreement regulates trade between the united states, Canada and Mexico.
President of Asset, economic adviser, Larry Kudlow, on Tuesday raised the possibility that the president of the attempt to replace Nafta with bilateral agreements with Canada and Mexico, move both nations oppose.
United states-Mexico trade is worth around $600bn each year, and approximately 16% of our products are subject to its neighbor to the south. Mexico sells about 80% of its exports to the united states.Trade sanctions: The basicsWhat is a commercial war? This is when countries attack other exchanges with taxes and quotas. We are going to raise the rates, a type of tax, to the detriment of the other to respond in a tit-for-tat escalation. This can hurt the economy and lead to rising political tensions.What are the rates? Taxes on foreign-made products. In theory, taxing items coming into the country (imports), makes people less likely to buy them as they become more expensive. They are likely to buy cheaper local products instead, to boost the economy of your country.What is a trade deficit? The difference between the way many of your country buys from another country, in comparison with what you are selling to this country. The united states has a huge trade deficit with China. Last year, it stood at about $375bn.