US-Mexico trade is on the verge of a renovation. US president Donald J. Trump says he wants accelerate talks to renegotiate the North American Free Trade Agreement, a deal he says has been a ‘catastrophe’ for America workers. Trump has floated a 20% import tax on all Mexican products to finance his border wall.
Because most of the $304.6 billion in goods that cross the US's southern border are untaxed under NAFTA, Trump has lots of room to run. A blanket tax, however, may not be the best approach. Tariffs are typically applied in a much more nuanced way.
Quartz gathered import data from the US Census Bureau comprising 6,011 hierarchical product categories, the amount imported, and the tax collected. Every product the US buys at least $1 million worth from Mexico is shown below through the lens of the Harmonized System, the international standard for categorizing and taxing traded goods.
The data are plotted along two axes: how much money the US sends to Mexico for those products, and what portion of all international purchases come from Mexico. Policy makers consult both of these factors when determining which products or categories to levy duties upon.
Products and categories with $1 million or more in US imports.
The US imported worth of Mexican goods from this product group in the 12 months preceding November 2016 and collected . Of all the goods in this product group, the US imported (by value) from Mexico.
In nearly two-thirds of trade categories no tariff was collected on goods crossing the Mexican border. Virtually no tariff was collected on 92% of product categories. (Though, the Census data do not record collections from anti-dumping or countervailing duties.)
Is a flat tax on all goods the most prudent way to accomplish the administration's policy goals? There are lots of products that the US relies on Mexico for almost exclusively. High taxes on those would just be passed on to Americans. There are also products that the US either buys very little of from Mexico or has other major suppliers, so the efficacy of a tax is questionable.
Mexico is the world's largest grower of avocados and the US is the largest buyer. No duty is collected on them at the border.
It’s not just Corona. 63.4% of US imported beer is brewed in Mexico. Most of it—$2.8 billion —comes in glass bottles and enters the US tax-free.
America buys 97.2% of the plastic ladders it imports from Mexico, $191.5 million in trade.
The second-most valuable import product category, $12.3 billion, is smaller vans and full-size pickup trucks. 99.6% of these US imports come from Mexico.
Mexico supplies the US with $570 million of these unfinished parts but that's only 4.7% of what the US imports.
The US imports just 3.1% of its lithium-ion batteries from Mexico but that still amounts to $17.4 million in trade.