June 19, 2018
Mexico retaliatory tariffs vs. US pork to start July 5
A current 10% duty on fresh/frozen pork cuts is set to rise to 20% on July 5, even as a 15% tariff on sausages and 20% on some hams came into effect immediately. In 2017, this trade totalled around 1.35 million tonnes worth around $1.2 billion, and accounted for 89% of total Mexican imports of the mentioned products, AHDB Pork reports.
For other global exporters, however, Mexico is opening a 350,000-tonne duty-free quota for imported pork cuts planned to remain in place until the end of this year to minimise any potential rise in pork prices on the Mexican market, according to the pork division of the UK levy body Agriculture & Horticulture Development Board.
The quota is open to Mexican pork processors and operates on a first-come-first-served basis. Established importers have access to 97% of the quota, with the remaining 3% reserved for new importers. Imports can be sourced from any country eligible to export pork to Mexico, which technically includes the US, according to the USDA as reported by AHDB Pork.
AHDB Pork said that several EU plants are already approved to export pork to Mexico. "Outside of the quota, these shipments would incur a 20% tariff, significantly limiting the viability of the trade and so in previous years, volumes supplied by the EU have been negligible", it added.
AHDB Pork further noted that it would not necessarily be easy for the EU to win a slice of the Mexican market. "It is unlikely to be viable to supply fresh/chilled product, which occupies 88% of imports at the moment". In addition, product will have to compete with Canadian and Chilean pork, which enjoys tariff-free access under separate trade agreements.