Mexico can fallback on the EU to source its pork or it could also get them from Canada. In 2017, Mexico imported 840,000 tonnes of pork.
On Tuesday, according to two sources with direct knowledge of the matter at hand, Mexico is set to impose a 20% duty on U.S. pork imports as part of its retaliatory measures against U.S. President Donald Trump’s tariffs on steel and aluminum.
Last week, Mexico had warned that it would impose retaliatory tariffs on pork legs and shoulders from U.S. suppliers.
90% of Mexico’s $1.07 billion of pork imports comes from the United States.
“It’s a 20 percent (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.
The Mexican government has yet to provide any details of the level of the tariff.
Its spokesperson did not immediately respond to a request for a comment on the tariff.
The imposition of tariffs on aluminum and steel has complicated negotiations to rework the North America Free Trade Agreement (NAFTA).
According to industry officials, Mexico could import more pork from Canada, which has a tariff-free access to Mexico thanks to NAFTA; importing pork from the European Union is also another option. The EU has recently concluded a revised trade pact with Mexico that allows it to import tariff-free pork without any restrictions, including volume quotas.
As per industry officials, the new pork tariff schedule will be published today in Mexico’s official gazette and will go into effect on Wednesday.
In 2017, Mexico imported 840,000 tonnes of pork.
As per Victor Manuel Ochoa, CEO of Granjas Carroll, Mexico’s top pork producer, a temporary import deal with Brazil for pork legs could be a potentil stop gap solution.
Prices of pork in Mexico is likely to rise because of the tariff hike.
“We think they’d rise around 15 or 16 percent, and I think that could reduce consumption which worries me,” said Ochoa.
He went on to add, “It would be very difficult for Mexican pork prices to stay the same” if the prices of imported U.S. pork prices rises due to the hike in the tariffs.
Incidentally, Granjas Carroll is a joint venture of ECOM Agroindustrial Corporation, a major commodity trader, and China’s WH Group.