Here are a few attention grabbers about the record amount of subsidized sugar Mexico dumped onto the U.S. market last year.
- Mexico sent an all-time high 2.1 million tons of sugar to America in FY2013. For perspective, that’s enough to supply every person in the U.S. with 13 pounds of sugar.
- This was up from 1.1 million tons the year earlier and marked a doubling of Mexico’s share of the U.S. market from 9% to 18%.
- The resulting price decline—U.S. prices have fallen 50% since the end of 2011—will cost U.S. producers $1 billion this year.
- The USDA was forced to spend $278 million in taxpayer money to keep the market from collapsing under the weight of Mexico’s dumped sugar.
- Mexico’s government, which owns and operates 20% of the Mexican sugar industry, is the country’s biggest producer and exporter of sugar.
The fact that an inefficient industry largely controlled by the government strengthened its foothold in America at the expense of U.S. farmers and U.S. taxpayers is alarming. But apparently, it’s just the beginning.
New USDA data show that Mexico is dumping sugar at an even faster pace this year than last. In fact, the 1.3 million tons that has arrived in the first seven months of FY2014 is 48% higher than over the same period the year prior.
Unless this pace suddenly cools, Mexico will break last year’s record and flood the U.S. with 2.3 million tons of dumped and subsidized sugar, further depressing prices and jeopardizing 142,000 U.S. jobs.
U.S. laws were written to keep unfair foreign trading practices like these from bankrupting U.S. businesses.
The time to enforce these laws has come, and the Department of Commerce and International Trade Commission recently took important steps by launching investigations into Mexican dumping and subsidies.
If corrective action isn’t taken soon, expect the problem to get worse, not just for sugar producers, but taxpayers too. The Congressional Budget Office predicts another $390 million in total taxpayer costs from FY2015 to FY2024 due to an oversaturated sugar market.
That’s an awfully steep price to pay to support an inefficient, foreign-government-run industry that refuses to play by the rules.