Mexico Issues Tariff List in U.S. Trucking Dispute

Mexico detailed its new tariffs on U.S.-made goods, roughly 90 products ranging from food staples such as potatoes and apricots to an eclectic mix including deodorant and Christmas trees.
 

Christmas trees	20%
Onions	10%
Peeled onions	20%
Pears	20%
Cherries	20%
Potatoes	20%
Soy sauce	20%
Soup, broth and stew mixes, and prepared stew, broth and soups	10%
Mineral water	20%
Sunflower seeds	15%
Products for manicures and pedicures	15%
Shampoo	15%
Toothpaste	15%
Deodorants and anti-perspirants	15%
Statuettes and other decorative articles	20%
Notebooks	10%
Curtain rods	20%
Coffee makers	20%
Waste from batteries, rechargeable batteries, chargers	20%
Sunglasses	15%

The specific goods, a combined $2.4 billion in exports to Mexico in 2007, mostly face import duties of 10% to 20% of their value. Fresh grapes will face a 45% tariff, by far the highest. Mexico said Monday it will levy the tariffs in retaliation for the recent shutdown by Congress of a pilot program that allowed some Mexican truckers to operate on U.S. highways. Mexico might increase the number of products it has slapped tariffs on if this first retaliatory round doesn't produce results, Beatriz Leycegui, deputy minister for foreign commerce, said Wednesday.
 

The Obama administration had urged Mexican officials to hold off on the new tariffs. The duties will particularly affect agricultural concerns that export to Mexico; California fruit and vegetable growers could be especially hard hit. Many of the choices of products are aimed at specific members of Congress. California is home to powerful Democratic lawmakers, including House Speaker Nancy Pelosi.
 

A spokesman for Transportation Secretary Ray LaHood on Wednesday said he is arranging meetings with key members of Congress in an effort to craft legislation that would restart the trucking program. The White House said President Barack Obama will travel to Mexico next month and meet with President Felipe Calderón. Secretary of State Hillary Clinton is expected to visit Mexico next week.
 

But with so many members of Congress opposed to the trucking program, it appears there will be no quick solution that would prod Mexico to rescind the tariffs.
 

John Toaspern, vice president of international marketing at the U.S. Potato Board, said potato exporters in Canada and Europe will now have a leg up. The tariff "will now make us 20% less competitive," he said. The California-based Wine Institute said it is "very concerned about the impact on California wine sales to Mexico," which were roughly $23 million last year. Tariffs will apply to some industrial products like toilet paper and certain telecommunications products. Motorola Inc. and consumer-products giant Procter & Gamble Co. said they expect little impact, but the National Christmas Tree Association and many California fruit growers were more pessimistic.
 

Mexican officials said they hope the tariffs will spur business leaders to lobby Congress to restart the trucking program. But they tried to avoid placing duties on commodities most vital to Mexican consumers. For instance, the tariffs target oilseeds, but putting duties on wheat would have had a bigger impact on North Dakota, home to Democratic Sen. Byron Dorgan, the trucking program's biggest opponent on Capitol Hill.

"There was no way for us to be tougher" on his state without hurting Mexican consumers, a Mexican official said. Mr. Dorgan on Monday said he was outraged and has safety concerns with the trucking program.
 

The trade flare-up comes at a difficult juncture in relations between the two neighbors. Mexican officials have bristled at U.S. suggestions that Mexico is floundering in its attempt to deal with its violent drug war, which claimed 6,000 lives last year. Drug-related violence in Mexico, and concerns that it could spread across the border, have been the subject of numerous congressional hearings. Texas Gov. Rick Perry has urged Mr. Obama to send troops to safeguard border areas.
 

Mexico's former ambassador to Washington, Jorge Montaño, said Mexico seemed to be wrapping itself in a nationalistic mantle at a time when Washington seems particularly open to its concerns. "Going to commercial war is a ridiculous thing which hurts both sides," he said, referring to the tariff decision.