The First Shot of an Obama Trade War?

Kevin Binversie / March 17, 2009

Last week, with the signing of his pen on the Omnibus Spending Bill, President Barack Obama ended a pilot program designed to allow Mexican trucking companies to ship goods deep inside the United States.  While controversial with some quarters of the American public, the program was necessary to ensure U.S. compliance with the North American Free Trade Agreement, commonly known as NAFTA.

With the program no longer funded, the United States would be willingly violating that trade treaty.  As a result, the government of Mexico announced plans to retaliate against the U.S. by raising entry tariffs on 90 products imported to Mexico from the United States with an annual worth of at $2.4 Billion. The Houston Chronicle reports:

“These are what are commonly known as reprisal measures,” Mexican Economy Secretary Gerardo Ruiz said in announcing the tariffs. “The reprisals are the cost the United States will have to pay.” (more…)