Mexico made it official today, retaliating against the NAFTA violation approved by Congress and signed into law by President Obama last week:
Looking to avoid a trade war with Mexico, the White House Monday called for legislation that would create a new program to allow Mexican trucks to enter the U.S.
The initial cross-border trucking project was terminated as part of the omnibus spending bill President Barack Obama signed into law last week, triggering anger south of the border. According to the Associated Press, Mexico said it will boost tariffs on some 90 U.S. products in retaliation for the cancellation, which it says violates the North American Free Trade Agreement.
I've written about this several times lately - most recently and completely here. Suffice it to say that this now raises the stakes for Secretary Clinton's trip to Mexico, which the Mexican press was already calling an 'emergency trip to lower tensions.' She will be called upon to convince Mexico to lower tariffs back to normal levels, but what will she offer in exchange? The trucker program can't be restored without legislation - which is unlikely to come any time soon. It's unclear what Obama can give Mexico without Congressional approval. It may be that Obama has simply given Mexico a chit that can be redeemed for a better deal if and when NAFTA is negotiated - which remains an Obama goal.
And more importantly, how could a genius like Obama - with an administration composed of the best and brightest - find himself trying to fix relations with Mexico so quickly?
According to the Associated Press, the commodities affected include both agricultural and industrial products, highlighted by rice, beans, wheat and beef. If you're a grower, how does it feel to have your interest sold out to protect a few Teamster jobs?