Trade War Between U.S. and Mexico Continues

Cold war days are over, but there's a new war brewing, this time it's between U.S. and Mexico. The trade war continues between the two nation as the mighty U.S. of A. remains to block selected Mexican trucks in their cross-border operations.

Recently, Mexico boosted tariffs to 99 more commodities imported from the U.S. This is Mexico's response for U.S. disposition against opening up its southern border to cross-border trucking operations as called for in the North American Free Trade Agreement (NAFTA).

Mexico’s latest action against America will affect about $2.5 billion worth of trade involving agricultural and industrial products from 43 U.S. states, according to the Associated Press. Mexico already put $2.4 billion worth of tariffs on 90 products in May 2009 after the U.S. abolished a pilot program that permitted some cross-border operations by select Mexican freighters.

Mexico’s Economy Secretary Bruno Ferrari said in the statement: “We have to act firmly so we can sensitize U.S. authorities about the urgent need to open that sector, which transports 70% of the commercial volume between both countries.”

The move befalls at a time when surface trade between all the NAFTA partners – Canada, the U.S. and Mexico – is on the rebound.

Surface transportation trade between the three countries escalated 39.5% in May 2010 compared to the same month in 2009. According to the U.S. Dept. of Transportation’s (DOT) Bureau of Transportation Statistics (BTS) it reached $66.8 billion – the largest year-over-year percentage increase in total U.S.-NAFTA trade through surface modes on record dating back to April 1994.

The surface transportation trade of U.S. and Mexico combined totaled $26.6 billion in May of this year. Up by 42.7% compared to May 2009, with the worth of imports and exports hauled by truck some 36.1% and 43.2% higher, respectively, in May this year against the same month in 2009, as noted by the BTS. With 9.4 billion, Texas led all the states in surface trading with Mexico in May according to the agency.

However, numerous groups are adamant that U.S. should maintain the current ban on Mexican haulers despite the continuing trade conflict.

Jim Hoffa, general president of the International Brotherhood of Teamsters, said in a statement: “Instead of slapping additional tariffs on U.S. goods, Mexico should be living up to its end of the bargain by making sure its drivers and trucks are safe enough to use our highways.”

According to Todd Spencer, executive vice president for the Owner-Operator Independent Drivers Association (OOIDA), “If the U.S. trade representative had called out Mexico for their illegal tariffs more than a year ago, we would not be in this situation.” He also added,“It was irresponsible to allow it to go on for this long.”

He noted that more than 18 months have gone-by since the taxes were first forced upon by Mexico because America denied to welcome Mexican trucks to pass its borders.