Tariffs as political weapons cause collateral damage

From the National Association of Wheat Growers and U.S. Wheat Associates

U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) are shocked and dismayed by President Donald Trump’s unilateral step to impose a 5 percent tariff on all Mexican goods imported by the United States. This action threatens to undermine approval of the U.S-Mexico-Canada Agreement (USMCA) and puts crucial wheat demand in Mexico at great risk.

“The potential fallout from new tariffs is like struggling to survive a flood then getting hit by a tornado,” said Chris Kolstad, chairman of USW and a wheat farmer from Ledger, Mont.

Bad feelings abounded in Mexico after the president publicly threatened to withdraw from NAFTA and imposed duties because certain Mexican products were called national security risks to the United States. Their government and industries, including flour millers, set out to broaden their supply sources. In 2018, Mexico increased its total wheat imports significantly, but U.S. wheat imports actually declined that year.

“With progress on the USMCA — most recently cancellation of the steel and aluminum tariffs — our customers in Mexico have been importing more U.S. wheat,” Kolstad said. “In a very disheartening coincidence, our organization is holding a conference next week with our Mexican customers partly to remind them how important they are to us. Of course, the cost of the conference is funded by the Agricultural Trade Promotion program that was awarded because U.S. wheat farmers proved they were being hurt by retaliatory tariffs.”

“We call on the president to rescind this threat immediately,” said Ben Scholz, president of NAWG and a wheat farmer from Lavon, Texas. “We’ve been hit by low prices; we’ve been hit by rain and flooding that is hurting what was an excellent wheat crop; and now we’ve been hit again by the actions of our own government. We need to end indiscriminate use of tariffs now, one way or another.”

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