Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Mexico getting set to impose high tariffs on U.S. chicken legs - final decision by August
According to The Poultry Site, Mexico is getting set to impose tariffs on U.S. chicken legs with the final decision on the tariffs to be made by August. Here is a selection from the story:
Mexico is copying China's tactics for growing its economy at U.S. expense through trade surpluses. Referring to China's ludicrous claim that the U.S. is dumping chicken feet on the Chinese market at a price lower than they are sold in the United States, The Poultry Site continues:
Like China, Mexico manipulates the exchange rate between its currency and the dollar, enabling it to run a $58 billion trade surplus with the United States in 2011. In his November 2010 speech, Federal Reserve Chairman Ben Bernanke reported (see Figure 8) that between September 2009 and September 2010, Mexico devoted 3.64% of its GDP to currency reserve accumulations which artificially weaken the Mexican peso and artificially strengthen the dollar so that Mexican products are artificially low priced and American products are artificially high priced. Almost all of the emerging market governments are copying China's growth strategy.
Free trade agreements are not worth the paper that they are written upon unless they include balanced trade clauses that allow any country running both an overall trade deficit and a bilateral trade deficit to impose an across-the-board trade-balancing tariff upon the other's goods. Balanced trade benefits both parties. Phony free trade gives jobs to the trade surplus country and debt to the the trade deficit country.
And just why is the Obama administration letting China (which had a $282 billion trade surplus with the U.S. in 2011) keep out US chicken products? WTO rules let trade deficit countries impose trade balancing tariffs, such as our scaled tariff.
Journal of Economic Literature:
Atlantic Economic Journal: