KansasCity.com reports that Mexico has now placed tariffs on $2.4 billion of American exports to Mexico in retaliation for Congress' terminating of access to the US for Mexican trucks. This will make American products less competitive in Mexico.
In addition, it will require the unloading of Mexican products in warehouses at the border and the reloading of the products on American trucks. The Department of Transportation estimates that this will add about $400 million to the cost of Mexican imports that the consumer will have to pay.
In a period of recession, such gamesmanship may lead to further retaliation that may impede free trade just as Smoot-Hawley did in helping to create the Great Depression. Of course, the Democrats have to pay off their union allies for support in the election.
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