Mexico's bargaining chips with Trump? How about a corn boycott

After Trump's election, Mexico has looked to other markets to import corn, a move that could devastate American farmers.

First domesticated here 10,000 years ago, corn is not only a staple of the Mexican diet, but also a symbol of Mexico itself.

Since the passage of the North American Free Trade Agreement in 1994, it has also become a symbol of Mexico’s growing economic dependence on the United States.

Now, as President Trump threatens Mexico with drastic changes on trade, its leaders are wielding corn as a weapon. Mexico’s Senate is considering legislation calling for a boycott of U.S. corn, and the government has begun negotiating with Argentina and Brazil to import corn from those nations tax-free.

The threat of a boycott is Mexico’s latest and perhaps cleverest attempt to fight back against Trump, whose threats to pull out of free trade agreements and slap a 20% import tax on Mexican products have shaken confidence in Mexico’s economy.

Mexico, which exported surplus corn as recently as the early 1980s, now buys a third of the corn it consumes from the United States. Last year, it purchased $2.5 billion worth of corn from Iowa, Nebraska and other states, making Mexico the largest corn export market for U.S. farmers.

Trump points to a roughly $60-billion trade deficit in Mexico’s favor as justification for a major overhaul of one of the United States’ most important and historically stable trading partnerships.

Seattle sues over Trump's 'sanctuary cities' threat, calling his executive order unconstitutional »

Organizers of the boycott say their goal is to highlight how much certain U.S. sectors depend on that relationship.

“Trump says Mexico takes advantage of the U.S.,” said Mexican Sen. Armando Rios Piter, who introduced the legislation last month after being inspired by a group of Mexican American immigrant rights activists calling for a boycott.

“We need to make it clear how much many states win from trade with Mexico,” said Rios, a member of the left-leaning Democratic Revolution Party. “It’s important that people in the Midwest know what Mexico means to them.”

Analysts say that although the proposed boycott is unlikely to pass, it is a deft political move because its biggest effects would be felt in Iowa, Nebraska, Wisconsin and other states that voted for Trump in last year’s presidential election.

For now, U.S. farmers have a clear advantage over South American sellers, thanks to proximity and a logistics system built up over decades, plus duty-free access that gives the U.S. an additional edge on prices. But elected leaders and agriculture advocacy groups in those states are now on high alert.

Tom Sleight, chief executive of the U.S. Grains Council, said he was worried about a shift in Mexican corn purchases, noting that Mexican customers who met with him this month were upset with the tone of NAFTA renegotiations. “They want to keep it business as usual, but there’s consistent talk about a Plan B,” he said.

In private meetings with Trump’s trade officials and in public settings, lawmakers have repeatedly warned about the potential harm to U.S. farmers should Mexico move to diversify grain imports by buying from suppliers in South America or other markets.

“I can’t stress enough that there will be real and immediate economic consequences for farmers if we lose exports,” Charles E. Grassley, the Republican senator from Iowa, said at a confirmation hearing this month on Robert Lighthizer, Trump’s nominee for the U.S. trade representative.

Antonio Turrent Fernandez, who is with Mexico’s National Institute for Forestry, Agricultural and Animal Husbandry Research, said the government should take this opportunity to increase investments in corn production instead of looking for new import markets.

“We need our elected leaders to begin seeing farther than the ends of their nose,” said Turrent.

Suggesting that Mexico could produce four times as much corn as it currently does with the help of better technology, he said, “We need a program that would allow us to be self-sufficient in providing the most important food product in Mexico.”

Part of the goal of NAFTA was to shift the economy from rural to urban areas, Turrent said. But that has made Mexico increasingly reliant on countries such as the United States.

Article Mexico's bargaining chips with Trump? How about a corn boycott compiled by