The Mexican government threatened to apply retaliatory tariffs if the United States maintains its «Product of USA» labeling.

Through a press release, the Ministry of Economy rejected the recent announcement by the United States Department of Agriculture (USDA) regarding the finalization of the «Product of USA» labeling rule procedure. 

The respective USDA final rule allows the voluntary «Product of USA» label to be used on meat, poultry and egg products only when they come from animals born, raised, slaughtered and processed in the United States. 

The rule will prohibit misleading labeling of U.S. origin in the marketplace, and will help ensure that consumers receive truthful information about the origin of their food.

In the opinion of the Mexican Ministry of Economy, this labeling is discriminatory to Mexican producers and could create barriers in binational production chains, in particular, to Mexican exports of live cattle and beef and its derivatives, which, in 2023, amounted to 3 billion dollars. 

Product of USA

«This measure threatens to generate disruptive effects in food chains, as well as logistical complications and additional costs, which, ultimately, would end up being paid by Mexican producers, but above all by U.S. consumers,» said the Ministry of Economy. 

Therefore, it argued that the measure contravenes the principles of economic integration that underpin the Mexico, United States and Canada Agreement (USMCA), and is counterproductive at a time when the productive linkage between the three North American nations has intensified as never before. 

The Ministry of Economy urged U.S. authorities to reconsider this rule and to intensify dialogue with their Mexican counterparts to avoid negative repercussions on bilateral trade. 

In fact, origin labeling has been a recurring issue in our trade relationship. It is enough to recall that since 2002, a measure of this nature promoted by the United States was declared inadmissible by the World Trade Organization (WTO). 

At that time, the final resolution quantified the damage to Mexico at 227 million dollars. 

Years later, the United States decided to withdraw the measure in order to comply with the ruling and avoid the imposition of costly retaliatory measures. 

Irritants

Mexico reiterated its firm commitment to constructive dialogue as «the preferred path» for resolving differences with its main trading partner. 

«However, in the interest of safeguarding the rights of our producers and maintaining a fair trade flow free of discrimination, it carefully analyzes the possibility of using the mechanisms available in both the USMCA and the WTO with the objective of ensuring that the United States complies with its commitments on Technical Barriers to Trade,» it said.