Christmas could come a little early for U.S. Christmas tree growers. Early this month, a penalty tariff imposed by the Mexican government on shipments of many U. S. goods into that country, including Christmas trees, is expected to be lifted.
The 20 percent tariff imposed in 2009 on U.S. Christmas trees exported to Mexico had resulted in a drop in sales for at least one grower, Holiday Tree Farms in Corvallis, OR, one of the nation’s larger such firms. Mark Arkills, production manager at Holiday, said he expects the lifting of the tariff will bring Christmas tree sales to Mexico by his firm back to100,000 trees this year, the level in 2008 before the tariff was imposed.
In 2008, two million trees worth $17.4 million, most of them grown in Oregon, were exported to Mexico.
The dispute between this country and its third-largest trading partner dated back almost two decades to the North American Trade Agreement, which allowed Mexican trucks to cross the border to deliver goods in the United States. In 1995, the Clinton administration banned Mexican trucks, citing safety concerns. Mexico obtained a ruling allowing it to levy retaliatory tariffs for the U.S. breach of NAFTA, but did not impose them until 2009.
Mexican truckers will be allowed to carry goods to and from destinations within the United States, but not within the country. They must meet safety standards more stringent than those for U.S. truckers, according to the July 7 Wall Street Journal, including English-language proficiency, drug and safety tests, and recorded monitoring of their movements.
Under the ban, a single shipment often required three trucks: one to haul the load to the border, a shuttle truck to take it across the border and a third truck to carry the load to its destination within the country.
“While we don’t have data showing that the tariffs hurt sales of U.S.-grown trees going into Mexico,” said Rick Dungey, spokesman for the National Christmas Tree Association, “there are cases where the U.S. growers were asked to share some of the cost of the tariff. In other cases it was paid by the Mexican importer.” Consumers suffer most when tariffs are imposed, he added, and ultimately pay the cost.