Mexico may fire first volley in trade war

A potential trade war with Mexico may start even without the U.S. firing the first volley.

According to the CNN wire service, Mexican senator Armando Rios Piter, who leads a congressional committee on foreign relations, says he will introduce a bill this week where Mexico will buy corn from Brazil and Argentina instead from the U.S.

This is in response to the Trump administration’s threats to slap Mexico with 20 percent tariff on imports into the U.S. Of course this is not good news for Minnesota farmers. Mexico is a big customer of Minnesota farmers. According to the Minneapolis Star Tribune, the state set corn and soybean production records in 2015. Corn production at 1.43 billion bushels was 4 percent more than the previous state record set in 2012. Yields of corn in Minnesota were also the highest ever, and averaged 188 bushels. Harvesting of soybeans in Minnesota also set a record in 2015 at 378 million bushels.

Of course, where there is supply, there has to be demand. Minnesota farmers can’t afford to lose Mexico’s demand. Hopefully, the Trump administration will find other ways to pay for the wall along Mexico and forget the import tax idea. Unfortunately, the trade rhetoric has already caused some damage to U.S./Mexico relations.

The Trump administration needs to change course and come to terms with the value of the Mexico market to U.S. farmers.