Trade war with Mexico: American protectionism at its worst
Last year, many Americans began to see the job-killing effect of this administration’s constant pandering to unions, and, it recently got worse.
To explain, let me take you back to 1993 when the U.S. Senate ratified NAFTA, the North American Free Trade Agreement. Under this treaty goods are supposed to move freely across the borders of Mexico, the U.S. and Canada. In 1995, under pressure from the Teamsters, President Clinton banned Mexican trucks from carrying imports from Mexico into the United States. In response, Mexico began negotiations with us…with no success…and, finally, in 2001 Mexico prevailed before a NAFTA “court”. President Clinton’s ban did, in fact, violate NAFTA.
In 2007, President Bush “lifted” the ban on Mexican trucks transporting goods across our southern border. The program was designed as a “test” for the purpose of determining the safety of Mexican trucks. Even though the “test” determined that Mexican trucks were as safe as American trucks, one of the first things President Obama did as president was to abolish the test program established by President Bush. Thus, we are, once again, in violation of NAFTA.
Mexico responded in March 2009 by putting tariffs of 10 percent to 45 percent on U.S. goods including vegetables, wine, juices, sunglasses and toothpaste.
According to Mexican Economy Minister Bruno Ferrari,
imports [from the United States into Mexico on the list of products that had the newly imposed tariffs] dropped 81% in the first year after the tariffs were imposed in March,2009…
A few weeks ago, Mexico upped the ante.
Washington state apples and California oranges and pistachios…will now cost 20% more in Mexico than they did…Cheeses from California and Wisconsin now face a 25% tariff… [Additionally, new tariffs have been placed on] pork, ketchup, chewing gum, grapefruit, chocolate and dried fruit… [while keeping the tariffs on] pears, apricots, cherries, peas, almonds, potatoes and wines.
American businesses, growers and workers are clearly hurt by these tariffs. At a time when we cannot afford to lose any jobs in this country, we certainly don’t need self-inflicted job losses that are little more than a poorly disguised attempt to protect the Teamsters union.
6 Comments
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Great idea.
Funny how "we" are protectionist about the trucking of legal goods and services, but quite the opposite when it comes to the protection(ism) of our borders from illegal aliens. Follow the money, or follow who it benefits most.
It seems that the DemocRATS love anything that resembles a tax. A tariff is a tax by any other name. The DemocRAT's thinking might proceed like this: If a hundred units of some product costing — for the purposes of illustration, $1 each and the DemocRATS slap a tariff (TAX) of 20% on that product, they are looking at garnering $20. (On that hundred units formerly costing $1 but, now they cost $1.20)
The tariff loving politicians are rubbing their hands over that tariff produced $20 and are devising ways to spend the $20 and then some.
However, now that the price of that product has risen 20%, it is less attractive to consumers. Consumers may or will stop buying that product. Why? Is it a bad product? No!
The product subjected to the 20% tariff doesn't sell as well (it can't compete) and the retailer orders less of the product and the reorder time is greater. The manufacturer sees that there less demand for the product, his profit is approaching zero and stops making it. Was it a bad product? No! It is just overpriced due to the, you guessed it, the tariff.
The tariff loving politicians will see the income stream from the tariff shrink and eventually cease. By the way, they have already spent the tariff money many times over, and even though that income has ceased. Why? The tariff (TAX) put on the product drove down demand and eventually curtailed consumption all together. The product was killed off by the tariff (TAX). How shortsighted is that?
Ronald Reagen said it clearly many years ago, "No one has ever taxed themselves out of a recession."
'Nuff said
NAFTA nearly killed me when it was imposed. While it looked like a great thing, when imposed it did not give immediate free trade. The way it was written the tariffs imposed at the time would be reduced yearly until it was at zero however, Canada's tariff's were far higher than ours therefore imports to Canada would thereby have tariffs attached long after goods coming from Canada. The Canadians subsidized much of the manufacturing in Canada in order to promote manufacturers to produce goods for their use as well as export. To compete was impossible, we had an unfriendly CT hitting us with taxes on every piece of equipment plus the raw goods and goods, then add a tariff and we had little profit. Now looking at Mexico today we see that all tariffs are to be at zero in order to comply with NAFTA and we are to allow free trade. We have to agree that we do get a lot of goods sent from Mexico to the US, you need only look into your favorite discount store or go look at your favorite automobile dealership, many parts or the auto itself is assembled in Mexico. So who is kidding who, the Mexicans are getting to do our work on both sides of the border, they assemble goods, they get them across the border, if not truck by other means or our own trucks and they come here and take our labor jobs away from our youth and hard blue collar workers. Fairness is not see in this scenario. Denying Mexican trucks from coming across the border freely does not exactly violate NAFTA, so long as goods can pass through without tariff, we are compliant. Mexico imposing tariffs to our goods is in clear violation of NAFTA, as it is preventing our exporters to export US goods freely.
Obama is neither oblivious to what is going on nor does he care; the destruction of America is going smoothly, he could not be happier.
SOS when Nafta was first passed some of the Mexican trucks coming across the border were indeed not safe. Drivers sitting on crates, poor lighting and bad brakes were just some of the safety violations. Things improved when American trucking companies opened sister companies on the mexican side. Manufacturers have facilities within spitting distance on each side of the borders. I'm a retired driver and I use to run unassembled product from RI to El Paso and drop the trailer in a warehouse. The trailer was inspected by customs sealed and picked up by a mexican driver brought over the border, the parts were assembled,boxed loaded and brought back across the border to the warehouse and I would pick it up and bring it back up here for distribution. Don't get me started on being able to go over to Ciudad Jaurez to see American doctors who work both sides.
TomL, I am fascinated by your post. Was there a cost to the Mexicans to have their trucks tested? Did that even the playing ground? It is amazing what you learn by these posts.