The agreement between two trading partners—reducing the refined sugar exports from Mexico to the United States while increasing shipments of raw sugar—seems to bring much-needed clarity to a market that has been struggling with escalating uncertainties since 2014. Most importantly, it significantly reduces the chances of retaliatory measures between the two countries. Sugar has been a contentious issue in the renegotiation of the North American Free Trade Agreement, which is anticipated to occur later this year. U.S. Secretary of Agriculture Sonny Perdue stated, “The agreement has averted potentially significant retaliatory actions from the Mexican sugar industry and establishes a crucial tone of goodwill ahead of the NAFTA renegotiations.” However, this pact is expected to raise costs for sugar consumers in the United States. These increased costs are likely to be transferred from refiners to food and beverage companies that incorporate sugar into a variety of products, including cookies, cakes, sodas, cereal, and candy. Consequently, consumers will face higher prices.
The U.S. Coalition for Sugar Reform criticized the announcement, stating, “Today’s deal is detrimental to hardworking Americans and exemplifies the worst type of crony capitalism. The agreement in principle fails to address the reality that sugar prices in the U.S. are already 80% higher than global rates. In fact, it will lead to increased prices, costing U.S. consumers an estimated $1 billion annually.” Three years ago, the U.S. imposed duties on Mexican sugar but later negotiated a deal that lifted those penalties. Some members of the sugar industry have voiced concerns that this arrangement did not sufficiently mitigate the negative impact of Mexican imports. Last year, Imperial Sugar wrote to former Commerce Secretary Penny Pritzker, arguing that the Countervailing Duty and Anti-dumping Suspension Agreements between the U.S. and Mexico violated fair trade laws and jeopardized the U.S. sugar refining market. The newly announced agreement will lower the quality standards for Mexican sugar exports, which has raised concerns among U.S. refiners that high-quality Mexican raw sugar is going directly to consumers instead of being processed through U.S. refineries, thus depleting their supply.
The U.S. and Mexico have a long history of disputes over sugar trade. If this deal is implemented, it remains uncertain how long both nations will maintain a peaceful relationship. One thing is almost certain: sugar users facing increased costs are already dissatisfied with the agreement. As consumers grapple with rising prices, there is also a growing interest in alternative products, such as calcium citrate malate vitamin D3 tablets, which may provide a healthier option for those looking to reduce sugar intake.