Trump says there's a 'good chance' that Mexico averts tariffs with deal that includes purchase of US farm goods - CNBC

President Donald Trump talks to the media before he departs the White House on June 02, 2019 in Washington, DC.

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President Donald Trump said Friday that Mexico may be able to avert tariffs on its goods by purchasing American agricultural products. Trump had previously said that escalating tariffs would be imposed, starting Monday, until Mexico took steps to stem unlawful immigration to the U.S.

"If we are able to make the deal with Mexico, & there is a good chance that we will, they will begin purchasing Farm & Agricultural products at very high levels, starting immediately," Trump wrote in a post on Twitter. "If we are unable to make the deal, Mexico will begin paying Tariffs at the 5% level on Monday!"

The Mexican peso hit session highs after Trump's tweet before edging down. Tariffs are paid by the domestic importer of goods, not the foreign exporter.

The tweet was posted while Trump was aboard Air Force One on his way back from Europe. U.S. and Mexican officials were meeting in Washington for the third day of talks aimed at resolving American border security concerns.

A White House spokesman did not immediately respond to questions from CNBC about agricultural exports, and the degree to which they were part of talks with Mexico. The Mexican Foreign Ministry did not immediately provide comment.

In 2018, the U.S. exported about $19 billion worth of agricultural products to Mexico, making it the second-largest buyer of U.S. farm-related products after Canada.

For many U.S. agricultural commodities, Mexico is the top buyer, including corn, rice, dairy products, poultry, eggs and pecans. Mexico also buys corn from South America and could potentially increase its purchases from the U.S. to help feed its livestock and for tortilla products.

Mexico also ranks as a major buyer of U.S. beef, pork, soybeans and wheat. Mexico, however, has looked to other global suppliers for its soybeans and wheat, especially Argentina and Brazil.

But the U.S. is a major importer of Mexican tomatoes, strawberries and avocados. It has led some U.S. farmers in the Southeast region to complain that Mexico is "dumping" fresh produce into the U.S. market.

Last year, Florida specialty crop producers urged the Trump administration to negotiate a special anti-dumping provision in the new United States-Mexico-Canada Agreement that would have allowed anti-dumping and so-called countervailing duty cases to be filed. The Southeast growers argued that the anti-dumping provision in the new trade deal would give U.S. farmers more leverage to hold Mexico accountable for not playing by the rules.

Yet some producer groups in California and in other U.S. Western states cautioned against including anti-dumping provisions in the replacement trade pact for NAFTA. They warned it could be used by Canada or Mexico to make a "dumping" case against U.S.-grown seasonal crops such as apples.

After the Trump administration last year imposed tariffs on imported steel and aluminum from Mexico and other nations, Mexico retaliated with levies on $3 billion of U.S. goods, including cheeses, pork, whiskey and certain fruits. Still, Mexico retained its position as the top buyer of U.S. cheese in 2018 although the EU has been pushing to increase its sales of cheese to Mexican market.

Through April, U.S. ag exports to Mexico are up a scant 2% to $6.1 billion, according to the USDA. The weak growth is due largely to decline in the value of pork exports south of the border. Still, sales of corn, wheat and soybeans are up by double-digit percentage levels, while dairy products were up by 6%.

— CNBC's Christina Wilkie, Fred Imbert and Kevin Breuninger contributed to this report.

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https://www.cnbc.com/2019/06/07/trump-says-theres-a-good-chance-that-mexico-averts-tariffs-by-purchasing-us-farm-goods.html

2019-06-07 18:11:58Z
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