President Trump has once again taken another action with his “America First” rhetoric that he has flaunted since the beginning his presidential campaign by placing tariffs on steel and aluminum imported from US allies, including Mexico. Steel imports from EU, Mexico and Canada has gone into effect since June of this year, increasing the taxes on steel to 25% and aluminum to 10%. These are huge numbers as the average tariff rate on US-EU traded goods were under 3%.
The targeted countries as well as other US allies followed up with immediate condemnation of the Trump administration’s protectionist action that is highly likely to cause immense political and economic damage to all countries involved, including US and Mexico. In retaliation, the Mexican government has decided to impose tariffs on US imported goods such as pork, apples, potatoes, bourbon and numerous types of cheese and other non-agricultural products, mostly of steel.
President Trump, who has been a fierce critic of NAFTA, has been pushing for negotiations on changes to the free trade deal, as he considered the overcapacity of steel rendered the trade agreement unfair. Many critics argue that the problem of overcapacity will not be solved by his tariffs as it will barely influence the true culprit behind the overproduction: China.
Experts claim that the new tariff will eliminate the United States’ ability to compete effectively in Mexico and will most likely end up with devastating results to countless people residing in agricultural industries, and industries that depend on cheap steel and aluminum. There are 110,000 jobs directly tied to US pork exports in US. Mexico is the largest market for US pork exports according to the National Pork Producers Council, who pointed out that 25% of US pork exports in 2017 went to Mexico.
Mexico, Canada and EU have pledged further retaliation to the Trump Administration’s actions. The imposition of the new tariff is likely to drastically hike up the average cost of basic necessities in US, Mexico, Canada and EU as trade war is likely to ensue.
Trump’s protectionist methods in the global economy has brought on heavy consequences—many of which strain America’s relationships with both friends and foes. The president’s actions regarding trades and tariffs are only in favor of his own country, and the decisions are made completely regardless of its consequences to other countries. His reign has mainly put both Mexico and Korea on their toes, both economics and politics-wise. Mexico and Korea should be fully aware of how Trump’s decisions effect their own countries and bear through the delicate situation.
HE SHIN