US consumers most affected by tariffs to Mexico
The imposition of the payment of tariffs on export products between the United States and Mexico, as part of the pressure measures for the renegotiation of the T-MEC trade agreement, affects mainly consumers.
The public accounting firm Salles Sainz Grant Thornton (SSGT) mentioned that the most outstanding example emerged with the measure imposed by the United States by increasing tariffs on Mexico's steel and aluminum imports to 25 and 10 percent.
The measure taken by the United States, to impose tariffs on Mexican steel and aluminum, has a more direct impact on the American consumer, as it becomes a domino effect.
SSGT's foreign trade specialist, Mario Echegaray, said that in order to counteract the economic effect of this measure and correct the hundreds of millions of pesos that were being lost, Mexico imposed tariffs on the importation of various goods originating in the United States.
These tariffs were in effect from June 2018 to January 2019, but as of March 25, 2019 they were again imposed, mainly on merchandise from the steel sector, it added in a statement.
This, since by making the inputs more expensive will be reflected in the price of the final product, since it will be more expensive for the US consumer, however, it will also affect Mexico.
"This will cause steel exports to decrease in the United States, a country that, although it is a major steel producer, cannot meet its national demand for steel and therefore resorts to imports," Echegaray said.
It should be remembered that last year, the United States imposed tariffs of 25 percent on Mexican steel imports and 10 percent on aluminum imports under the so-called section 232, citing national security reasons.
It is expected that at the end of April the US Trade Commission will issue its report on the economic implications of the T-MEC, which will be sent to the US Congress for discussion and approval in its case.
The specialist partner in Foreign Trade of SSGT considered it extremely important to understand the effect of everything that implies the imposition of tariffs.
"The fact that the United States imposes tariffs on Mexican products for import into the United States, the first affected will be the United States; On the other hand, if Mexico imposes tariffs on US products to defend us, it impacts us as Mexican consumers."
The accounting firm said that since the imposition of the levy, Mexican steel exports to the United States fell 37 percent, according to the National Chamber of the Iron and Steel Industry.