Mexico Slaps Tariff On U.S. Products In Truck Dispute

Mexico slapped new tariffs on some U.S. pork and cheese products on Wednesday, the latest in a long-running spat between the two nations over U.S. refusal to permit Mexican truckers to cross the border. It's a tough problem for President Obama, who sees expanded trade as a key to economic growth.

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Mexico is slapping new tariffs on dozens of U.S. products this week. It's the latest move in a long-running battle over the U.S. government's refusal to let Mexican trucks travel beyond a narrow stretch of the border.

As NPR's Scott Horsley reports, the trade dispute presents a challenge for President Obama, who has set a goal of doubling exports within the next five years.

SCOTT HORSLEY: For the last decade and a half, Craig Hill has been one of the beneficiaries of the North American Free Trade Agreement. Now, he could become one of its casualties. Hill is a hog farmer in Warren County, Iowa.

Mr. CRAIG HILL (Farmer): We're a family operation. My son and I and wife all participate in the labor here, and we've got about 1,600 pigs on feed, and farm about 1,700 acres.

HORSLEY: When Hill started farming in the late 1970s, nearly all American pork was sold domestically. Now, Hill says about a quarter is shipped to other countries, including jamon and carnitas sold in Mexico.

Mr. HILL: We depend a great deal on exports here in the U.S. And I think Mexico is one of our better customers.

HORSLEY: So Hill is greatly concerned about the 5 percent pork tariff that Mexico announced today. Mexico took the action to protest America's failure to let Mexican trucks travel its roadways. Under NAFTA, Mexican trucks were supposed to have access years ago. But Congress has kept them out, under pressure from the Teamsters union.

Although the few Mexican trucks that have been allowed in showed no unusual safety problems, Teamsters President James P. Hoffa insists they present a threat.

Mr. JAMES P. HOFFA (President, Teamsters Union): To let these truck drivers and trucks on our highways, that do not meet our standards, is to endanger the American driving public. That's why we're against it.

HORSLEY: For years, Mexico patiently accepted the roadblocks. But when Congress canceled a pilot trucking program last year, the Mexican government had enough and imposed retaliatory tariffs. The additional tariffs announced today are designed to put more pressure on Congress. They're a setback for President Obama, who's made boosting exports a key part of his economic agenda.

President BARACK OBAMA: Export growth leads to job growth and economic growth.

HORSLEY: Labor expert Harley Shaiken, of the University of California at Berkeley, says the widening trade dispute with Mexico puts Mr. Obama in a delicate position.

Professor HARLEY SHAIKEN (Labor Expert, University of California at Berkeley): The president's got a real paradox here. He wants to double exports -and there is a lot of support for that, to be sure. But he also risks alienating labor, a key part of the Democratic base, on the eve of pivotal elections in November.

HORSLEY: Opposition from organized labor could also be a stumbling block as the president tries to finalize a new free-trade agreement with South Korea, something he says he wants to do by November.

In the meantime, pork producers are not the only ones likely to pay a price for the trucking standoff. Mexico has attached tariffs of up to 20 percent on dozens of U.S. products, including sweet corn, chewing gum and ketchup.

Nick Giordano is with the National Pork Producers Council.

Mr. NICK GIORDANO (National Pork Producers Council): This takes a toll in terms of U.S. exports, U.S. jobs. And the way out of the box here is simply for the United States to come into compliance with its obligations under the NAFTA. This is what we want other countries to do. It's a two-way street.

HORSLEY: U.S. Trade Representative Ron Kirk says the U.S. is committed to working with Mexico and members of Congress on a resolution that would satisfy both trade obligations and safety concerns. But trade experts say any resolution will get tougher the closer we get to the November elections.

Scott Horsley, NPR News, Washington.

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