Mexico set to impose 20 pct tariff on US pork legs – Sources

MEXICO CITY: Mexico will impose a 20 per cent tariff on US pork imports, two industry officials with direct knowledge of the plan told Reuters, for the first time providing details of the country’s retaliatory measures to US President Donald Trump’s tariffs on steel and aluminium.

Last week, Mexico said the retaliatory tariffs would apply to pork legs and shoulders from US suppliers, which account for about 90 per cent of the country’s US$1.07 billion annual imports of the cuts.

“It’s a 20 per cent (tariff) on legs and shoulders, fresh and frozen ... with bones and without bones,” said Heriberto Hernandez, president of Mexico’s leading pork producers association OPORPA, following a briefing earlier on Monday with Economy Minister Ildefonso Guajardo and his team.

The government has not yet given details of the level of the tariff and did not immediately respond to a request for a comment about the tariff or the meeting.

Hernandez said he supported the Mexican government’s decision and does not expect it to cause pork prices in Mexico to rise because “there are many alternatives” to US suppliers.

The tariff was in response to the Trump administration’s decision last week to impose steel and aluminium tariffs on Mexican exporters on grounds that countries including Mexico engage in competition damaging to US national security.

The US decision to go ahead with the steel and aluminium tariffs has complicated talks with Mexico and Canada to rework the North America Free Trade Agreement (NAFTA).

Other industry officials pointed to Canada as a possible substitute pork supplier that has tarifffree access to Mexico thanks to NAFTA, or the European Union, which recently concluded a revised trade pact with Mexico that allows tariff-free pork imports but does include other restrictions like volume quotas.

The industry officials said the new pork tariff schedule will be published on Tuesday in Mexico’s official gazette and will go into effect on Wednesday.

Last year, Mexico imported nearly 650,000 tonnes of pork legs and shoulders worth an estimated US$1.07 billion, according to government data.

Mexico’s overall pork imports in 2017 totalled about 840,000 tonnes.

Pork legs and shoulders are not as highly valued in the United States, where ribs and bacon are in greater demand, but in Mexico they are used to make some of the country’s most popular dishes, including tacos al pastor and carnitas.

Victor Manuel Ochoa, chief executive of top Mexican pork producer Granjas Carroll, said he would support a temporary import deal for Brazilian pork legs if Mexico goes ahead with the tariffs on US imports.

He said prices in Mexico will likely rise as a result of the tariffs on US pork. “We think they’d rise around 15 or 16 per cent, and I think that could reduce consumption which worries me,” Ochoa said.

Granjas Carroll is a joint venture of ECOM Agroindustrial Corporation, a major commodity trader, and China’s WH Group. — Reuters