FARMERS in the U.S. agricultural heartland that helped elect Donald Trump are now pushing his administration to avoid a trade dispute with Mexico, fearing retaliatory tariffs that could hit more than US$3 billion in U.S. exports.

    The value of exports at risk is based on an analysis of a tariff list which Mexico used in a trucking dispute six years ago and which Mexican officials have said could serve as a model if Trump sets new barriers to Mexican goods.

    Pork producers contacted Trump’s transition team soon after the Nov. 8 election to stress that tariff-free access to Mexico has made it their top export market by volume, said John Weber, president of the National Pork Producers Council.

    The council has sent the administration multiple letters, including one signed in January by 133 agricultural organizations, and is arranging for several hog farmers to fly to Washington next month to talk to officials.

    “We just keep pounding them on how critical trade is to us,” said Weber, who fears Mexico could revive the list of mostly agricultural products it successfully used to push Washington into letting Mexican truckers on U.S. highways in 2011.

    Pork products topped that list and, if revived, the tariffs would apply to over US$800 million in annual pork exports, according to data compiled by IHS Markit’s Global Trade Atlas. “We’ll be the first to take the hit,” Weber said.

    The lobbying effort by U.S. businesses which rely on the Mexican market shows how Mexico can press its case in Washington despite having an economy 1/17 the size of America’s and relying on the U.S. market for nearly 80 percent if its exports.

    In Iowa, where pigs outnumber people seven to one, hog and grain farmer Jamie Schmidt voted for Trump in part on his promise to cut regulatory burdens for businesses.

    Now he and others who farm the flat, rich land around Garner, Iowa, worry about trade. Schmidt gets about half of his income from hogs, earning US$4-5 for each of the 425 pigs he sells per week, usually to a Tyson Foods packing plant in nearby Perry, Iowa.

    Tariffs from Mexico could depress U.S. wholesale prices and wipe out his profits, Schmidt said. “It would be devastating.”

    In December, after fears of a trade dispute fueled a deep peso slump, Mexico started mapping out U.S. states that are most reliant on its market, replicating the strategy it used in the trucking dispute, said two senior Mexican officials.

    Mexican officials also prepared briefs on Mexico’s own risks in a dispute, including losing much of its cost advantage in building cars, such as the Ford Fusion made in Hermosillo, Mexico.

    Mexico’s foreign minister said last month tariffs could target Iowa, which raises a third of U.S. hogs and exports about a quarter of its pork production, US$100 million of which went to Mexico last year.

    The minister also said tariffs could aim at Wisconsin, the center of U.S. cheese production, and has singled out Texas for its “notable” trade surplus with Mexico. All three states voted for Trump in the 2016 election, with the president taking Iowa and Wisconsin by slim margins.

    Trump has accused Mexico of destroying U.S. jobs and has vowed to leave the 1994 North American Free Trade Agreement with Canada and Mexico if he cannot renegotiate better terms with Mexico. United States went from running a small trade surplus with Mexico in the early 1990s to a US$63 billion deficit in 2016.

    Besides pork, cheese was also a top target in the trucking dispute in which Mexico retaliated with tariffs against rules that banned its trucks from U.S. roads. Some US$200 million in current annual exports of cheese would be targeted if the tariff list were revived, according to the IHS database, which the U.S. Government uses to measure the impact of trade disputes. (SD-Agencies)