The extreme cost of Mexican tariff’s on US businesses

Has anyone thought about the cost to American business and American consumers when the righteous tariff’s take effect in a couple of hours? Has anyone thought of the potential job loss to American workers?

It is for certain Jimmy Hoffa could care less. Nor does Todd Spencer of OOIDA who is of the opinion that Mexico is simply blowing smoke up peoples asses, as he so disdainfully stated on the Trucking Bozo radio program the other day. They’re both preening and patting themselves on the back about their shallow victory.

That’s right, it was published in the Federal Register today. The highly successful Cross Border Demonstration Program with Mexico, was officially ended today.

American business is already assessing the potential losses, in profits and in terms of job losses and the numbers aren’t pretty.

More than 40,000 American workers in 17 or more states can potentially lose their jobs because of Hoffa’s protectionist attitude, an attitude not based on any factual data concerning the safety of Mexican trucks, but simply because the Teamsters are not allowed to organize in Mexico, as they are in Canada. Let’s hope the majority of those 40,000 jobs lost are union jobs, Teamster jobs. Wouldn’t that be ironic.

There are over 6.5 million trucks in the United States. The Cross Border Program allowed 98 Mexican trucks to roam among them. And over that, they are willing to risk a trade war with Mexico. They are getting what they asked for and what they deserve

From the vineyards of California’s Napa Valley to Oregon, to little towns in the heartland, there is a sense of impending doom.

From the Santa Rosa (Ca.) Press-Democrat
California wineries dragged into trade fight between U.S., Mexico

Wine, which has been shipped to Mexico without any tariffs since 2006, will face a 20 percent tariff, said Joe Rollo, export director for the Wine Institute…….

Mexico is an emerging market for California wine exports, fueled largely by U.S. tourism. More than 100 California labels are represented in the market, mainly in coastal tourist areas, according to the Wine Institute……..

California wineries sold $23 million in wine in Mexico in 2008, down slightly from the prior year. Sales leapt from $17 million in 2006, when the tariff was 20 percent, to $24 million in 2007 when the tariff was eliminated, Rollo said.

Up the coast in Oregon

The Oregonian
Mexican tariffs will cost Oregon ‘millions’

…………. a move effective today that could cost Oregon exporters tens of millions of dollars.
The duties include 20 percent tariffs on Christmas trees, pears and frozen potatoes, all of which Oregon sells to Mexico……
Mexico spent $748 million last year on goods from Oregon…….
“The vote was to save jobs for the unions, but it’s going to cause problems for several other industries,” said Bill Brewer, executive director of the Oregon Potato Commission.

He said the United States could lose its entire $80 million in annual french-fry exports to Mexico, for example, because Canadian competitors won’t have to pay $16 million in tariffs. Most of those fries came from the Northwest.

And for those who mistakenly assume Mexican businessmen are stupid, A Mexican official confirmed Wednesday that pressuring specific U.S. politicians was one consideration in picking products from certain states for tariffs. He spoke on condition of anonymity, saying Mexican officials don’t want to inflame the dispute further. The same Mexican official confirmed his government chose the $2.4 billion worth of products partly to target states with powerful Democratic politicians.

“The intention is to let the constituents know that it’s important the United States respects and abides by its international obligations,” the Mexican official said.

Proving that the politicians the unions have in their hip pockets are continuing to march to the beat of their masters drum, U.S. Rep. Peter DeFazio, D-Ore. stuck by his position and blasted Mexico for its tariffs, which he branded illegal. “I don’t think these things can or should stand,” said DeFazio, a member of the House Transportation and Infrastructure Committee, where he chairs the Highways and Transit Subcommittee.

No Mr. Defazio. You know perfectly that Mexico has the right to impose these sanctions in retaliation for us reneging on our word for the past 15 years. You have been part and parcel of perpetrating the fraud that led to this moment.

As I previously mentioned, Mexico’s tariffs could cost the United States more than 40,000 U.S. jobs, including roughly 1,000 in Oregon, according to one economist. Many of the targeted products are easily available from other countries, meaning Mexican consumers won’t be inconvenienced, said Dermot Hayes, an Iowa State University professor.

The list includes grapes — targeted for the highest tariff, of 45 percent — which are grown in California, home state of Democratic U.S. House Speaker Nancy Pelosi. Hayes cited other examples such as shampoos and sunglasses, from Obama’s state of Illinois; bowling equipment, from U.S. Senate Majority Leader Harry Reid’s state of Nevada; and books and brochures, from Secretary of State Hillary Clinton’s home, New York.

“Keep in mind that all these tariffs come up from zero percent,” said Edgar Navas, trade director for Nafta Group, a Portland consultancy. “A lot of products that are in transit will be affected.”

Navas feels that Mexico’s action is justified and within the country’s rights under the Nafta pact. He faults the Teamsters for provoking Mexico and risking a trade war.

“You take the economic panic, and it’s very prone to nationalistic reactions and pseudo-patriotism,” Navas said. “It’s just going to accentuate the economic crisis.”

There are tariff’s being raised on personal hygiene products that will effect workers from Proctor and Gamble headquartered in Ohio. Just about anything you can imagine that Mexico imports from the US is covered except for the basic commodities.

And Hoffa and Todd Spencer claim they are concerned about the loss of American trucking jobs? Well, during the 18 months of this successful program, not one American job was taken by a driver from Mexico. On the other hand, the tariff’s and the lowered demand for American products will impact an already slow freight base.

Remember that boys and girls, when you’re sitting in a truck stop for a day or two and finally have to take a shit load of freight just to be moving. Thank Mr Hoffa for your troubles. And don’t forget to thank Todd Spencer and all those who have propagated the lies of him and Hoffa over this issue.

These retaliatory tariffs were unnecessary and we would not be having this discussion if people would learn to think for themselves and research a subject, instead of letting their fears and prejudices overrule common sense, which has been the case here.

Imagine, one little man’s ego causing so many people so much misery, and needlessly. Sleep with that thought if you can.

If you wanted to do protectionism, do it competently. Go the full Smoot-Hawley. But over 98 to enrage Mexico, to threaten to destroy NAFTA, and to show the world that the American Congress is willing to impose protectionism over trivialities at a time when the economy is hanging by a thread, where every other country is looking to see if American is going to turn protectionist.

And, as we saw in the stimulus package, it included a provision to buy American, which enraged the Europeans. There is a huge amount at stake, meaning the world economy and the risk of a world depression if you have trade wars. And to do it over 98 truck is absolutely absurd.

National Review
The Oregonian
and others, including my own brilliant mind containing a brain that I know how to use.

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