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Mexican Tariffs Threaten Export Trucking

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Trucking freight to Mexico just became more expensive.

On August 18, the Mexican government released an updated and expanded list of products that will be subject to tariffs when imported from the United States. From pork to chewing gum to ketchup, 99 types of freight � valued at $2.5 billion � will be charged tariffs ranging from 5 to 25 percent.

The bold move is the latest demonstration of Mexico�s frustration over a 15-year disagreement with the U.S. on cross-border trucking.

In 1994, The North American Free Trade Agreement (NAFTA) opened our continent�s borders for trading across countries; however, concerns over Mexico�s safety standards for trucks � and labor groups who oppose free trade � have prevented Mexican trucking companies from traveling freely on American highways. After over a decade of stalling and negotiations, a pilot program began in 2007, giving 100 safety-approved, Mexican trucking companies free access to operate in our country.

Due to Federal budget cuts, however, the program ended in early 2009, despite an independent investigation showing the carriers had no accidents and lower out-of-service hours than their U.S. counterparts.

Mexico initially showed disappointment in the cancelled program by adding tariffs to 89 types of freight in March 2009. Within one year, 81 percent of the affected freight experienced a drop in exports.

The new list of taxed imports includes 73 of these original products, along with an additional 26 goods. A total of 43 U.S. states will be affected.

Reactions to the most recent tariffs are wide-ranging.

In a San Antonio Express-News article, Nelson Balido, president of San Antonio�s Border Trade Alliance, agrees with the move.

�Fifteen years is far too long to be still debating how to comply with the NAFTA trucking articles,� says Balido. �Mexico's decision to slap these tariffs on more U.S. goods is not only legal, it's understandable.�

The Teamsters Union and Owner-Operator Independent Drivers Association (OOIDA) � who have fought against opening the borders to Mexican truckers � have a very different reaction.

OOIDA Executive Vice President Todd Spencer believes the U.S. government has acted irresponsibly by not stopping the tariffs sooner, which he thinks led the industry to the current situation.

Different organizations and interest groups continue to give impassioned responses to the tariffs, but ultimately, the government will have to decide how and when to respond.

The fight might be difficult to resolve, considering:

  • President Obama wants to double exports in five years on the basis that growth in exports will lead to further job and economic growth,
  • No cross-border trucking solution has been found over three Presidencies, and
  • The labor unions that oppose cross-border trucking hold powerful voting sway in this election year.

No one knows for sure yet how the situation will resolve. As always, Getloaded will keep you up-to-date with developments, so you can stay informed.

In the meantime, we want to know your opinion:

Do you oppose or support cross-border trucking?

How do you feel about the tariffs?

Is Mexico�s frustration justified or out-of-line?