WASHINGTON – Mexico hit back at the United States on Tuesday, imposing tariffs on around $3 billion worth of U.S. pork, whiskey, cheese and other goods in response to the Trump administration’s steel and aluminum levies, further straining relations between the two countries as they struggle to rewrite the North American Free Trade Agreement.
The tariffs came as the Trump administration threw yet another complication into the fractious NAFTA talks by saying it wants to splinter discussions with Canada and Mexico and work on separate agreements rather than continue three-country discussions to rewrite the trade deal.
Larry Kudlow, President Donald Trump’s chief economic adviser, said Tuesday that Trump’s “preference now, and he asked me to convey this, is to actually negotiate with Mexico and Canada separately.” Kudlow, speaking on “Fox & Friends,” said pursuing separate deals might allow an agreement to be reached “more rapidly,” adding: “I think that’s the key point. You know, NAFTA has kind of dragged on.”
The Trump administration hit Mexico and Canada with 25 percent steel tariffs and 10 percent aluminum tariffs on June 1 as part of a campaign to pressure the countries to agree to America’s demands on a revised NAFTA. The United States also imposed metals tariffs on the European Union, Japan and other countries as part of an effort to stop the flow of imported metals.
That approach has only inflamed allies, including Canada and Mexico, which have threatened to strike back with their own targeted tariffs aimed at Republican states and areas that supported Trump.
Mexico’s list was designed to hit at parts of the United States represented by high-profile Republicans, Mexican officials have said, including steel from Vice President Mike Pence’s home state of Indiana, motorboats from Sen. Marco Rubio’s Florida, and agricultural products from the California district of Rep. Kevin McCarthy, the House majority leader.
Farmers, who are among those most vulnerable to the Mexican tariffs, said the tariffs would devastate U.S. agriculture.
“These tariffs will exact immediate and painful consequences on many American farmers,” Angela Hofmann, deputy director of Farmers for Free Trade, said in a statement. “Hog, apple, potato and dairy farmers are among those suddenly facing a 10 or 20 percent tax hike on the exports they depend on for their livelihoods. Farmers need certainty and open markets to make ends meet. Right now they are getting chaos and protectionism.”
It is unclear which country will blink first, leaving the future of the trade deal, and the millions of jobs across the continent that are linked to it, so uncertain that many companies are withholding investments they might make to take advantage of the pact.
Kudlow insisted that the president was not planning to withdraw from NAFTA — which he has frequently threatened to do. However, splitting the current trilateral deal into two separate bilateral agreements would likely require nullifying the 25-year-old agreement.
On Friday, Trump said he would be interested in pursuing separate deals. “These are two very different countries,” he said. “I like free trade, but I want fair trade,” Trump said.