The new law blocks Mexican "long-haul" trucks from bringing goods in to the United States, beyond 25 miles of the border. Opponents of the trucks coming into the U.S. claim the Mexican vehicles aren't as safe. A less charitable view of the situation is that, absent the bill, Mexican goods would be picked up by American unionized trucks. (In fairness, some conservative and anti-immigration groups oppose the long-haul trucks out of fear that they are used to smuggle illegal immigrants.)
When the Democratic Congress attempted to end the program last year, Mexico threatened to impose tariffs on American goods. The issue never came to a head because the Bush administration vetoed the bill restricting the trucks.
U.S. & World
Now, given the rough economic times enveloping the globe, this is probably one of the worst possible times to reward "big labor" with something for which it has been itching for some time.Tariffs between neighboring countries are rarely a good idea -- even in the best of circumstances.
Sure enough, the Mexican government has responded by imposing tariffs on close to 90 American products. If the situation continues, don't be surprised if Tijuana suddenly becomes a more expensive spring break for US college students.
But there's a far greater problem than just a tariff war breaking out. The Mexican government is already involved in hot war with drug traffickers right on the U.S. border. The violence has been spilling into Arizona and New Mexico, so it goes without saying that a trade war couldn't come at a worse time.
Is the Obama administration paying attention -- and connecting the dots?