President Donald Trump talks to the media before leaving the White House on June 2, 2019 in Washington, DC.
Tasos Katopodis | Getty Images
President Donald Trump said on Friday that Mexico could potentially avert tariffs on its goods by buying American agricultural products. Trump had previously announced that escalating tariffs will be introduced from Monday until Mexico takes steps to stem illegal immigration to the US.
"If we are able to complete the deal with Mexico, and there is a good chance that we will start to buy Farm & Agricultural products at a very high level, from now on," Trump wrote in one Post on Twitter. "If we are unable to make the deal, Mexico will start paying tariffs of 5% on Monday!"
The Mexican peso reached a high after Trump's tweet before abating. The duties are paid by the domestic importer and not by the foreign exporter.
The tweet was released when Trump was returning from Europe aboard Air Force One. US and Mexican officials met in Washington for the third day of talks to resolve US security concerns at the borders.
A White House spokesman did not immediately respond to CNBC's questions about agricultural exports and the degree to which they belonged. The Mexican Foreign Ministry did not issue an immediate statement.
For many, Mexico is the largest consumer of US agricultural commodities, including corn, rice, dairy, poultry, eggs and pecans. Mexico also buys corn from South America and could possibly increase its purchases from the US to feed its livestock and tortilla products.
Mexico is also a major consumer of US beef, pork, soybeans and wheat. Mexico, however, has turned to other global suppliers of soybeans and wheat, especially Argentina and Brazil.
However, the US is a major importer of Mexican tomatoes, strawberries and avocados. Some US farmers in the Southeast region have complained that Mexico is "dumping" fresh produce on the US market.
Last year, specialty crop producers in Florida called on the Trump administration to negotiate a special anti-dumping provision for the new US-Mexico-Canada agreement, which would have allowed the filing of anti-dumping and so-called countervailing duties. Southeastern growers argued that an anti-dumping provision in a new trade agreement would give US farmers more leverage to hold Mexico accountable for non-compliance.
However, some producer associations in California and other western US states have warned against adopting anti-dumping provisions in the NAFTA Replacement Trade Pact. They warned that it could be used by Canada or Mexico to initiate a "dumping" case against US seasonal crops such as apples.
Following the introduction by the Trump government of tariffs on imported steel and aluminum from Mexico and other nations last year, Mexico imposed tariffs on US $ 3 billion in tolls, including cheese and pork, Whiskey and certain fruits. Mexico maintained its position as the main consumer of US cheese in 2018, although the EU sought to increase cheese sales in the Mexican market.
By April, US agriculture exports to Mexico rose by nearly 2% to $ 6.1 billion, according to the USDA. The weak growth is mainly due to the depreciation of pork exports south of the border. Sales of corn, wheat and soybeans increased by double-digit percentages, while sales of dairy products increased by 6%.
– CNBC Christina Wilkie Fred Imbert  and Kevin Breuninger contributed to this report.