Trade-War Drums: Is Mexico Ready to Fire at the US Corn Belt?

Various groups are clamoring for it in the third largest market for US food exports.

By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET.

Mexico, the birthplace of maize, is dangerously hooked on U.S. imports of largely transgenic strains of the crop. In 2017 it was the third biggest importer of corn in the world, behind the EU and Japan, purchasing 15.2 million tonnes of the foodstuff, most of it from U.S. farmers and agribusinesses. But that could soon change.

Following the U.S. government’s decision to impose steep duties of imports on steel and aluminum from Mexico, Canada and the EU, Mexico, a net importer of US steel, has hit back with tariffs on US products including whisky, cheese, steel, bourbon, and pork. The move has upset U.S. businesses, including pork producers, who now face a 20% tariff on exporting leg and shoulder to Mexico. Mexico is the largest market for US pork exporters. It’s also the third largest market in the world for U.S. agricultural exports as a whole, pipped to the post by China and Canada.

For the moment the Mexican government has ruled out imposing duties on U.S. imports of staple foods such as corn, beans and soy, largely out of fear that it could further fuel food inflation, especially with the Mexican peso once again slumping against the dollar. But calls for such action are rising.

If Trump doubles down on his tariffs while continuing to insist on separate bilateral talks with Canada and Mexico, the Mexican government could end up taking the nuclear option of restricting U.S. imports of corn. Given that the biggest corn-producing states in the U.S. were also among the supporters of Trump in the last election, Mexico’s government has a clear strategic motive for doing so.

“If we want to stop this [trade war] and hit the U.S. government where it really hurts, we should target America’s corn belt by imposing a tariff on imports of U.S. transgenic corn,” said Angel Contreras Carrera, the president of the State Agricultural Union of Corn Producers.

Carrera is not the only person calling for such measures. From the campaign trail presidential front runner Andrés Manuel Lopez Obrador (or AMLO) recently said: “We buy over 14 million tonnes of corn. (…) This is a contradiction, an aberration. Corn originally comes from Mexico and it now turns out that Mexico is one of the biggest importers of corn in the world. This cannot go on.”

Since NAFTA, Mexico has become unhealthily dependent on food imports from the US. In 2016 Mexico imported a staggering 46% of all its food, much of it staples. It bought a third of the corn it consumed from the US, worth some $2.3 billion in 2016; between 30-50% of its beans; and up to 80% of its rice, according to data provided by the Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food (Sagarpa).

In return, Mexico exports to the U.S. tomatoes, chili peppers, avocado, coffee, grapes, strawberries, water melon, and so on. But it’s the staple crops that matter the most — and they are almost all moving in one direction: southward. But perhaps not for much longer. Mexico has already sharply increased its imports of corn from Brazil. Plus, many of the staple food products it has grown to depend on from the U.S. could be produced just as easily in-house, including sugar, corn, rice, and beans.

There’s also the health impact to consider. In August 2017, a joint study by researchers from the National Autonomous University of Mexico and the Autonomous Metropolitan University revealed a startling fact: a staggering nine out of ten tortillas (the corn flatbread that is the basis of the Mexican diet) contain traces of GM corn. Furthermore, the alleged carcinogen glyphosate was detected in nearly one-third of all the food samples that had tested positive for the presence of GMO substances.

“The data are particularly worrying, since maize is our basic food and we have lost our food sovereignty,” the research team said at a press conference. “Consumption of glyphosate-containing genetically modified corn can have serious health consequences.”

What makes this finding so surprising is that over the last five years, all cultivation of GM corn has effectively been banned in Mexico after a judge ruled to suspend the granting of licenses for GMO field trials on environmental grounds. And while almost all imports of corn from the U.S. are transgenic, they represent roughly a third of all the corn sold on the market. Which would suggest there has been a significant degree of cross pollination from GM to non-GM plants.

But according to the study, transgenic contamination is far more widespread in processed foods (especially cereals, flour, and packaged corn-based snack foods) and the industrial, machine-made tortillas that are distributed and marketed in small stores (tortillerías) throughout the country than tortillas produced by hand from native maize, which showed virtually no contamination at all.

“Tortillas made in peasant communities solely from native maize (grown in those communities) contained almost NO transgenic proteins or glyphosate,” the UNAM-UAM team wrote. “Trace amounts of these proteins could potentially be present in native maize as a result of transgene contamination, but stewardship of native maize by Mexican communities has kept it overwhelmingly free of transgenes [since their appearance in Mexico].”

In other words, there’s still time for Mexican farmers, if given enough support by government authorities and consumer groups, to safeguard the world’s richest deposit of corn varieties from further transgenic contamination. Until now government institutions in Mexico have largely been on the side of the world’s GMO giants, but thanks to Trump’s bargaining, that position could soon become untenable.

If left-wing nationalist AMLO wins the national elections on July 1, an outcome that is looking increasingly likely, much to the horror of business leaders on both sides of the US-Mexican border, America’s trade war with its southern neighbor could be set to escalate in a very big way. By Don Quijones.

The War on Cash suffers a setback. Read… Visa Goes Down in the UK, Chaos Ensues, Cash is Suddenly King 

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  56 comments for “Trade-War Drums: Is Mexico Ready to Fire at the US Corn Belt?

  1. d says:

    P 44 is doing things the wrong way, the problem is those who have miked the US for a long time through unbalanced tariffs and unbalance unfair trade.

    Are refusing to hear that there are genuine problem, that need to be addressed, as they know they are the ones that will need to give, when the problems are addressed.

  2. raxadian says:

    Doesn’t Brazil uses glyphosate too? Or they no longer do it?

    • d says:

      Unfortunately yes but glysophate is not the core issue in the article or in the trade and tariff imbalances.

      P 4 is trying to aggressively and rapidly shut the barn door long after the horse herd has gone.

      The Globalised Vampire Corporates, currently allied with china, spawned and raised in America. No longer need America.

      Something P 44 and his American base, dosent understand.

      Once a replacement for the US $ is found. America is going to have big trouble staying in the G 20 let alone the G 7/8.

      As china and America are today the two most hated nations on this planet.

      • Silly Me says:

        I believe that the fall of the dollar around 2030 will create the largest crisis the world has ever seen (food, fuel, and water shortages). I also believe, that is part of the plan of the vampires who, indeed, no longer need the US.

  3. VarAway says:

    Are you serious? Taxing the imported US corn?
    Before or AFTER the july elections??
    What do you think the US will be doing?
    Not taxing the Mexican made cars that are shipped to the US?
    I am not kidding.
    There will be only ONE winner in this pending trade war.
    And you know who that winner will be.
    No rocketscience at all.

    • Norma says:

      No one I know eats corn or corn products same goes for potatoes, they are high carb and not keto. I lost 40 pounds on keto and my doctor was surprised that my blood results were normal after I was diagnosed pre diabetic. I’m 58. Never eating corn or potatoes ever again.

      • alex in san jose AKA digital Detroit says:

        Keto here too, 40 lbs lost too.

        However, corn and potatoes go into feed for the animals I do eat, so being keto doesn’t insulate us from this.

        We’re basically looking at Hoover II here. Any way he can wreck the economy under the guise of saving it, he’ll do.

      • Joe Chaisson says:

        Norma –

        Same here. I showed up as prediabetic about nine months ago and immediately dropped refined carbs out of my diet. Subsequent blood work a couple of months later showed me well back into “no problem” levels. My doc had never seen such a quick turn around. And my weight dropped back to my early twenties quite physically active level as well. I am 71. Never going back!

      • RangerOne says:

        Yeah I have to second responses below. Unless you have a $3k a month food bill and only eat “grass finished beef” not “grass feed” from a farm you trust or are a twisted vegan who avoids corn and potato’s I guranteed you that you at least eat corn. Because every animal from chicken to cows is feed corn even grass feed, cage free and organic ones. This of course impacts your dairy products too.

        Corn subsidies mean corn is either in everything or was used to fatten up everything.

  4. Ambrose Bierce says:

    Whoever dreamed the US would be growing dangerous and unhealthy foods to export to the third world?

    • don says:


      Glyphosate is the most commonly used herbicide worldwide, with both residential and agricultural uses. In 2015, the International Agency for Research on Cancer classified glyphosate as “probably carcinogenic to humans,” noting strong mechanistic evidence and positive associations for non-Hodgkin lymphoma (NHL) in some epidemiologic studies. A previous evaluation in the Agricultural Health Study (AHS) with follow-up through 2001 found no statistically significant associations with glyphosate use and cancer at any site.

      The AHS is a prospective cohort of licensed pesticide applicators from North Carolina and Iowa. Here, we updated the previous evaluation of glyphosate with cancer incidence from registry linkages through 2012 (North Carolina)/2013 (Iowa). Lifetime days and intensity-weighted lifetime days of glyphosate use were based on self-reported information from enrollment (1993-1997) and follow-up questionnaires (1999-2005). We estimated incidence rate ratios (RRs) and 95% confidence intervals (CIs) using Poisson regression, controlling for potential confounders, including use of other pesticides. All statistical tests were two-sided.

      Among 54 251 applicators, 44 932 (82.8%) used glyphosate, including 5779 incident cancer cases (79.3% of all cases). In unlagged analyses, glyphosate was not statistically significantly associated with cancer at any site. However, among applicators in the highest exposure quartile, there was an increased risk of acute myeloid leukemia (AML) compared with never users (RR = 2.44, 95% CI = 0.94 to 6.32, Ptrend = .11), though this association was not statistically significant. Results for AML were similar with a five-year (RRQuartile 4 = 2.32, 95% CI = 0.98 to 5.51, Ptrend = .07) and 20-year exposure lag (RRTertile 3 = 2.04, 95% CI = 1.05 to 3.97, Ptrend = .04).

      In this large, prospective cohort study, no association was apparent between glyphosate and any solid tumors or lymphoid malignancies overall, including NHL and its subtypes. There was some evidence of increased risk of AML among the highest exposed group that requires confirmation.

      • RangerOne says:

        Shhhh don’t tell people not to be frightened of the GM booty monster…. The second people drop the term GM like I should gasp my eyes role and I glaze over… There is no hard scientific consensus the genetic modifications in general have any impact on health or nutrition.

        Most issues focus on peticides. Even there people blindly accept that organic is better not seeming to realize that organic gets way more peticides since it is forced to use less effective “safe” pesticides.

        There are valid issues to take up with GM, but there is no mass of evidence that health is one of them yet.

        • Ambrose Bierce says:

          gee i thought the issue was that we set the standards for public safety; clean water, clean air. Past history shows that pesticides outlawed in the US show up in third world countries, who then export their products to the US. the rich choose to buy organic (which is how that movement got started) and they live longer healthier lives while the poor (those who apply the pesticides) have much shorter lifespans.

        • graham says:

          sure, just like tobacco.
          How stupid is the population?

    • Little Red Hen says:

      The same corporate boards and CEOs that manufacture processed food for Americans, the fattest, least healthy people on the planet. Look at us, in airports, malls and stores. Obesity, bad teeth and unfitness everywhere. It’s a planned project to destroy American health and vitality–which includes the ability to THINK.

  5. George McDuffee says:

    While certainly not the only factor, directly and indirectly subsidized grain exports, produced on ultra-high efficiency factor farms, is a major factor in causing the flood of socioeconomic refugees from Latin America into the United States. As indicated in the article, the exported grain has captured huge market shares in a number of countries, leading to the displacement of large numbers of domestic farmers and farm workers which previously produced this grain. These individuals and their families first migrated to the trading towns look for work, and then on to the major cities when no work was available locally. In almost all cases there was no work available in the large cities, so the only perceived alternative to starvation (and a possible visit from the local death squad) was to flee to the US. Given that the only skill these unfortunate individuals have is small scale / subsistence agriculture, and in many cases speak a language other than Spanish (Indian dialect) integration into the US culture/socioeconomic will be difficult, As Pogo Possum cogently observed back in the ’60s, “We have met the enemy, and they is us.”

    • caradoc says:

      An example of not thinking consequences through. Repeated across the world when one sector or another is given preferential treatment.

      Those having to move also bring down the labour rate of the less well off in the area they move to. Always the less well off that have no voice are impacted. Treated like fodder.

  6. endeavor says:

    Screw tariffs. Put a 10% Vat in place and cut payroll taxes like amount.

  7. Paulo says:

    I call hypocrisy and bullshit when I see it. The US subsidizes its’ entire ag production, even paying farmers not to plant in order to keep prices high. Corn is a prime example. Corn is THE prime example, think ethanol. If US farmers over-produce, then tough…(Wisconsin dairy). What ever happened to the famous Free Market in the US? This subject reminds me of bailouts.

    We’ll keep our supply mgt regime in Canada. It works. The US is welcome to adopt something similar for their farmers. “-) Just produce less.

    Interim solution. Flour tortillas are excellent and will suffice as a substitute until Mexico can ramp up domestic corn production to historical levels. Canada always has surplus wheat for export and I am sure both Mexico and Canada can work out a beneficial agreement that not only includes wheat, but will substitute Mexican winter vegetables in place of Florida and California products.

    Trade agreements have to be win win for both sides. America First implies only the US will come out ahead in all situations, and everyone else will be 2nd!!!! plus…Trump will crow about it. This will never be acceptable in either Canada or Mexico. Furthermore, Congress decides trade agreements, not the Executive. Even if Trump nixes Nafta the agreement remains in place as to tarrifs and charges etc. until such time as Congress votes any changes into law. So, when will that get done? Not very soon, with midterms on the short horizon.

    Sometimes, bluffs just look stupid. Goforit. The World does not belong to the US.

    • james wordsworth says:

      Totally agree. Look at the US sugar industry as exhibit 1.

      Look the US has a deficit in goods, but a surplus in services. If it really wants to reduce the goods deficit, buy less, and stop borrowing to buy. The reason China has so much US debt is that the US has been living beyond its means as a nation for too long.

      Much of the US goods deficit has been imported oil … why because americans drive a lot and drive cars that relatively speaking guzzle gas. It is a choice. Drive cars that use less gas, and presto the trade deficit mostly disappears. But no, can’t do that. It might help the climate crisis, or infringe on the right spend as much money as one can get hold of, even if it has to be borrowed.

      Solution: Up gas taxes, and keep raising them. Put a VAT in place to reduce consumption. Presto… Trade deficit gone. But no the US wants to blame others for its own issues.

    • California Bob says:

      One of my uncles–who I love dearly–is virulently anti-‘socialism,’ anti-government and hard-core right-wing happily accepts a check–I’m guessing in the low tens of thousand of dollars annually–to NOT grow cotton on an otherwise worthless piece of land in California’s Central Valley. The hypocrisy on the right is simply astounding. Yes, there is some hypocrisy on the left, but it pales in comparison to the chest-beating, flag-waving ‘right.’

      • alex in san jose AKA digital Detroit says:

        I have yet to meet a right-winger who didn’t greedily slurp up any and all gov’t handouts they could get and if possible, any they couldn’t legally get but got anyway.

        Self-sufficiency, my ass.

        Meanwhile, I work, and before I’d take food stamps etc I’ll go out and wash windows, sell handicrafts, do odd jobs, weed gardens, you name it, I’ve probably done it. I’m considering teaching myself sign-lettering because a human being with a brush can makes signs far cheaper than any computerized system, and quicker too, and it’s a solid trade. And I work on music skills in case my dodgy eyesight gets worse.

      • Kent says:

        Take your dirty stinking government hands off my Medicare!

  8. Gershon says:

    An excellent analysis. The biodiversity of corn in southern Mexico has been no match for the agribusiness corn dumped on Mexico by the agribusiness cartels and their GMO frankencorn. No wonder that small Mexican farmers call opium poppies “the crop that pays.” NAFTA has benefited only the multinationals and agribusiness at the expense of small landholders and workers on both sides of the border.

  9. unit472 says:

    The demand for basic food isn’t very elastic. Yeah, Mexico could buy corn from Brazil and European ham but it adds transportation costs and would hit Mexico’s lowest income people hardest.

    OTOH tariffs on Tequila and Bourbon are a draw. You can drink rum or vodka instead.

    This is why Trump holds the cards in this dispute. Canadian lumber and Mexican avacados don’t affect American daily lives.

  10. Rates says:

    I hope not because the US will go tit for tat and put a tariff on avocado.

    Do you guys know how harmful that is to California and Millennials?

    Heck, out here in California, avocado is the fuel for the Millennial Falcon. The whole economy will crumble if Avocado Toast is sold higher than 8 bucks.

    • Tom Jones says:

      Anybody with a yard can grow an avocado tree in SoCal…they only ripen AFTER picked…so can have fresh avocados all year. Imports often sell three or 4 for 99cents here locally…but if stop…no problem with growing all you want. I used to buy them 10/$1 from people with a tree in the yard…still get free ones sometimes. Not a problem in Calif. at all.

      • Rates says:

        My post was literally dripping with sarcasm. And the fact is the last time import from Mexico was disrupted, prices did rise here in CA.

  11. van_down_by_river says:

    Business Insider is reporting the trade war has been cancelled during talks at the G7 summit – I’m not joking. BI reporting that Trump changed his mind (yet again) and will not be imposing ANY new tariffs. It was nothing but a bunch of hot air – a play performed by an idiot, sound and fury signifying nothing.

    Still waiting for the cancellation of Obamacare that was promised. So far all I see is larger government and a bunch more deficit spending, my taxes (as a middle American) remain essentially unchanged, no more than a rounding error in my finances.

    • Prairies says:

      In typical “presidential” fashion the agreement was tore up once the man child got out of the room and felt confident behind his computer screen. He talks a big game but once confronted he bends like a cheap noodle.

      The big question will be answered June 31st. Will he buckle or push forward, if he backs this agenda the US economy will slow due to the world seeing the US market is not willing to trade with anyone any longer. Maybe that will be the catalyst to pop the everything bubble.

  12. Petedivine says:

    Mexico is dealing with a full on energy crises. I wouldn’t worry too much about their exports. In a couple of years they will naturally decline…think Venezuela. 80% of Mexico’s trade is with the U.S., they’re in no position for a trade war. However, if Mexico were really smart they’d fight back by putting export tariffs on silver. Mexico produces 25% of global silver supply. They could easily corner the market and control the price. Silver is a commodity found in almost all technologies. In 2016 the U.S. imported almost 7000 tons of silver, most of which came from Mexico.

    • Caz says:

      Mexico is more prepared for a trade war than Trumpists may want to admit, hence they are retaliating. Even before the Trump era, Mexico was the country with most free trades agreements in the world. It was just that, they were not used.

      After Trump, Mexico has increased it´s trade with other countries (They signed the TPP for example, and just a couple of weeks, they signed a free trade agreement with Europe). In the short run, they may be hurt by NAFTA, but in the long run this is definitely going to benefit Mexico just for the single fact that they´ll diversify trade.

      Also, Mexico is working in opening “special economic zones”, that will severely lower the taxes to companies that invest in those places. And these “special economic zones” will surely be cheaper than anything in the first world.

      There´s no small opponent, and Trump does knows this.

  13. Josandro says:

    Seems like the smart way to do this would be to announce far enough before the growing season to make sure that your own corn growers have a plentiful crop ready at the time that you restrict the imports.

    Seems like for this year’s crop, its already too late. And, unless this happens to be the amount of time needed for planning and seed buying for next year’s crop, now is too early.

    Of course, that’s if a government really cares about keeping food costs under control. If the idea is to produce a windfall for some key contributors, then maybe now the time is just about right.

  14. Christiana says:

    I seem to recall that Mexico’s corn farmers got clobbered back when NAFTA came into effect.

    • saylor says:

      Yup, heard the same thing.
      And that region had/has 150 different varieties of ancient maze.
      That ‘attack’ by U.S. corn producers was largely responsible (as I’m to understand it) the wave of border crossings due to loss of income by the local farmers there.

  15. farmlad says:

    I really think making such a move would be a bit painful but would benefit the Mexican society in the long run. As fossil fuels start petering out we will be forced to go back to local food production and distribution systems, any alternative will mean famine and starvation.

    It’s sad seeing so many rural communities supported by subsistence type farmers being uprooted and demoralized by industrial AG. This process has already happened across the USA and is now in the final stages throughout Latin America.

    Lets hope the Mexicans show us the way.

  16. sierra7 says:

    It really is sad to see the results of the NAFTA agreement and what it has done to the Mexican Campesinos. Many suicides; and as one commenter posted above what alternative do they (and so many others in Latin America) have to the crushing of their local markets by the NorthAmericanos all in that criminalized label of “Free Markets”! A “Good Neighbor Policy”? Of course they will try to enter the US to survive. Most Americans have no clue as to what the “food sources” are. As the monstrosities labeled “corporations” shuffle about the smaller living entities are literally crushed underfoot. Something has to change!

  17. Z says:

    We trade poison corn for illegal aliens. Maybe we should stop doing that.

  18. biffula says:

    Mexico would never do anything to cut the peasants off from corn. Maybe now Pres. Trump has the leverage for slowing down the illegals, hmm?

  19. Alex says:

    Put Bayer out to pasture! The names will change and the stupid will suffer if not. Then again maybe we should let the dumb ones go. Look up my friend Dr Darrell Tanelian; he went Galt and first explained to me the dangers of GMOs.

  20. Steve says:

    Its time for Trump to post what products we are being screwed on and what countries are doing it. Time for the Admin to list the areas where we are taken advantage of other than stealing our intellectual property. If foreigners want to tariff our ag products, let them starve and reduce the price of food for us in the US.

    We finally have someone standing up for USA, bout time!

    • Steve clayton says:

      Hi Steve, I agree on a list of products being produced the US you are being screwed on by country. The only one we keep hearing is the steel issue. I agree with what your guys trying to do but the issue is let’s say over the last 30 years previous administrations have allowed this to happen. The other issue is also down to plants in the US being uncompetitive. Another issue simple example, I bought a Rams jumper from the US, it was made in Honduras, shipped from Vegas cost me twice as much as the jumper in duty and taxes, what’s the point in me buying US goods if that happens on most things? Regards Steve UK.

    • Kent says:

      It is not other countries screwing us. It is our own corporate leaders. Nobody forces Apple to make iPhones in China or forces Ford to make trucks in Mexico. American capitalists could move everything back if they wanted. Providing millions of jobs for Americans.

      They choose to not do that because mass manufacturing empowers labor unions and incomes for working class Americans at the expense of their own incomes. Until people start recognizing that, there is no hope.

      • William Murphy says:

        There is no hope because people will never recognize that.

      • Nicko2 says:

        Some of those factories are moving back…..except they are staffed by robots and only a few highly trained humans. There is now going back. Former blue collar workers need retraining and skills upgrading. That is the only answer.

    • Prairies says:

      It is a lot of reading but check out – this lists all tariffs USA applies around the world.

      He boasts about how dairy has a 270% tariff applied from Canada – his only point of leverage I guess – but doesn’t mention the fact the US has restrictions on how much dairy Canadians are allowed to import from the US. If tariffs were removed, the Canadian supply would likely run short and drive prices up for Canadians. But Americans don’t care about their allies so… Blame Canada – South Park was right.

  21. christy says:

    POTUS is taking down the vampire squid. G7 or 6+1 or whatever you wanna call it KNOW THE GIG IS UP. WWG1WGA

  22. Randolf says:

    If GMO corn slathered in Glyphosate is good enough for us, it’s good enough for the Mexicans. How dare the Mexicans think their bodies are more important than ours?

  23. Gian says:

    From January 2017 to November 2017, Mexican’s here in the US sent home $26.1 billon, according to the bank of Mexico. Kinda makes the corn issue seem like peanuts. Thus far, those who underestimate President Trump have ended up losing. I suspect the same will be said here too.

  24. Mean Chicken says:

    “The move has upset U.S. businesses, including pork producers, who now face a 20% tariff on exporting leg and shoulder to Mexico. ”

    I read somewhere that consumers benefit tremendously, from lower prices. And I recall this was the argument in favor of offshoring jobs (labor arbitrage).

  25. Sinbad says:

    The US spends about $10 billion a year subsidizing corn and other agricultural products. It would be very hard for any nation to compete against such large subsidies

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