The White House has announced a one-month pause on tariffs for imports compliant with the USMCA from Mexico and Canada until April 2. This suspension aims to mitigate price increases on agricultural products and marks a collaborative effort between U.S. and Mexican leadership amidst ongoing supply chain discussions. Zippy Duvall calls for permanent resolutions on trade issues to support farmers and market access.
On Thursday, the White House announced the suspension of tariffs on imports compliant with the United States-Mexico-Canada Agreement (USMCA) until April 2. This pause extends to goods from both Mexico and Canada that adhere to the trade treaty, complementing the earlier exemption for automotive imports from these nations.
President Donald J. Trump highlighted this decision, stating it reflects recognition of the automotive supply chain’s structure aiming to bolster American production. Approximately 50% of imports from Mexico and nearly 40% from Canada are compliant with USMCA, as reported by CNBC.
This tariff suspension provides crucial relief for the food industry, impacting various agricultural products covered under USMCA. The previous imminent tariff increases posed risks of surging prices on items like avocados, tequila, and tomatoes from Mexico, alongside oats and canola oil from Canada.
Zippy Duvall, president of the American Farm Bureau Federation, urged President Trump to seek a permanent resolution regarding issues with Mexico and Canada to maintain vital markets and support farmers’ accessibility to necessary supplies.
While the suspension addresses certain tariffs, a 25% tariff on steel and aluminum imports is still set to commence on March 12, which could escalate packaging costs for food and beverage companies. Furthermore, the U.S. is poised to initiate a universal reciprocal tariff policy on April 2, coinciding with the end of the current pause.
In discussions earlier Thursday, President Trump and Mexican President Claudia Sheinbaum agreed on the tariff pause. Trump expressed his decision stemmed from respect for Sheinbaum, commending her collaboration on tackling fentanyl trafficking issues. Sheinbaum reaffirmed the commitment to work together on migration and safety, addressing the illegal flow of fentanyl into the U.S. and weapons into Mexico.
The recent suspension of tariffs on imports from Mexico and Canada under the USMCA provides significant relief for the food industry, appealing to agricultural products. American leaders stress the importance of permanent resolutions with these trading partners to maintain market stability and farm supply access. Although certain tariffs are paused, looming steel and aluminum tariffs promise to challenge costs moving forward, reflected in ongoing diplomatic discussions. The adherence to trade agreements and international cooperation remains pivotal for economic relations between the U.S., Canada, and Mexico, underscoring the complexity of tariffs and their effects on various sectors.
Original Source: www.fooddive.com
