This week Mexico announced tariffs on U.S. cheeses which could have a devastating impact on U.S. dairy exports.
Mexico accounts for 28% of all U.S. cheese exports, making it the No. 1 export market for U.S. cheese, according to the U.S. Dairy Export Council (USDEC). The Mexican initiated the tariffs in retaliation for the tariffs President Trump placed on steel and aluminum imported from Canada, the EU and Mexico.
“Tariffs on cheese will potentially eliminate the competitive advantage we have in our No. 1 market,” said USDEC president and CEO Tom Vilsack. “That is a legitimate concern.”
Mexico’s tariffs include the following cheese products:
- Fresh Cheese: 15% tariff until 7/5; 25% tariff thereafter.
- Cheese of other types, shredded or in powder: 10% tariff until 7/5; 20% tariff thereafter.
- Grana or Parmegiano-reggiano, Gouda, Havarti, Fontina, etc.: 10% tariff until 7/5; 20% tariff thereafter.
- Other: 15% tariff until 7/5; 25% tariff thereafter.
“This is a significant setback for our farmers, processors and our exporters,” said Jaime Castaneda, senior vice president for trade policy of the USDEC.
The full impact of the tariffs on milk prices is still unknown. However, Greg Ibach, USDA undersecretary for marketing and regulation says the entire Trump Administration is monitoring the situation closely and will not hesitate from taking action to protect farmers from feeling the brunt of trade negotiations.
“We continue to work with the different commodity organizations to understand how they are being impacted and what the ramifications of some of the negotiations are having on their industries,” Ibach said in an interview with AgDay’s Betsy Jibben at the World Pork Expo. “We continue to look for those opportunities down the road to see how they’ve been impacted by these negotiations and if there’s a role for USDA to play in working together with them. Both the secretary and the president want to work to mitigate the impact that these negotiations have on agriculture.”
How significant are U.S. cheese exports to Mexico? Check out these facts from USDEC:
- Mexico is the No. 1 U.S. cheese export market.
- In 2017, the United States held a 75% share of Mexico’s cheese import market.
- U.S. cheese shipments to Mexico were valued at $391 million last year.
- Last year's U.S. cheese exports to Mexico increased 8% in value over 2016.
- Mexico accounts for 28% of total U.S. cheese exports.
- U.S. suppliers shipped 96,413 tons of cheese to Mexico in 2017.
- Over the last decade, both the volume and value of U.S. cheese exports to Mexico have nearly tripled.