Mexico is a central trade partner with the United States and the Midlands.
The federal government should be working to strengthen those economic opportunities rather than risking a trade war between our two countries.
Nebraska and Iowa each conduct more trade with Mexico than with any other country except Canada. Nebraska sold $1.26 billion worth of goods to Mexico in 2015. For Iowa, the export figure was $2.1 billion.
The Midlands’ economic connections with Mexico stretch across a wide range of sectors.
In 2014, about 30 percent of Nebraska soybeans and 17 percent of corn were bought by Mexico.
“The importance of trade to America’s farmers and ranchers cannot be overstated,” wrote 16 ag producer groups in a Jan. 6 letter to then President-elect Donald Trump. Signers included the national producer organizations for soybeans, corn, dry beans and wheat plus the American Farm Bureau Federation and the National Farmers Union.
The World-Herald’s Russell Hubbard reports that Union Pacific’s rail trade with Mexico in 2015 totaled $2.3 billion, up from about $1 billion in 2004. Trade with Mexico currently accounts for 10 percent of the company’s operating revenue.
The connections have been notable, too, for Omaha-based trucking firm Werner Enterprises. Its business with Mexico increased from $80 million in 1995 to $375 million in 2015.
Much of that cross-border interaction involves the shipping of manufacturing inputs that are vital to efficient operation of global supply chains.
A report from the Congressional Research Service last year highlighted that point:
“U.S. manufacturing industries, including automotive, electronics, appliances and machinery, all rely on the assistance of Mexican manufacturers. One report estimates that 40 percent of the content of U.S. imports of goods from Mexico consists of U.S. value-added content.”
The Trump administration has floated the idea of a 20 percent tax on imports from Mexico. Steve Nelson, president of the Nebraska Farm Bureau, said such a policy “has the potential to be devastating to agriculture — U.S. agriculture and Nebraska agriculture.”
Gov. Pete Ricketts also pointed to concerns, saying, “Generally speaking, I am very concerned about taxes that would disrupt our trade relationship with Mexico. I urge the Trump administration to look for ways to grow trade opportunities for Nebraska’s ag producers and manufacturers.”
That is sound advice on the best way to move forward.