The agreement between the two trading partners—reducing the amount of refined sugar Mexico exports to the United States while increasing raw sugar shipments—seems to bring clarity to a market that has faced mounting uncertainty since 2014. Most notably, it significantly decreases the chances of retaliation between the two nations. Sugar has been a pivotal issue in the upcoming renegotiation of the North American Free Trade Agreement later this year. U.S. Secretary of Agriculture Sonny Perdue remarked, “The agreement prevents potentially significant and retaliatory actions by the Mexican sugar industry and establishes a crucial tone of good faith ahead of the NAFTA renegotiation.”
However, the pact is expected to raise costs for sugar consumers in the United States. This increase is likely to be passed on by refiners to food and beverage companies that incorporate sugar in a variety of products, including cookies, cakes, sodas, cereals, and candy. Consequently, consumers will face higher prices. The U.S. Coalition for Sugar Reform criticized the agreement, stating, “Today’s announcement is detrimental to hardworking Americans and exemplifies the worst form of crony capitalism. The principle agreement does not address the fact that sugar prices in this country are already 80% higher than the global price. In fact, it will lead to an increase in prices that could cost U.S. consumers an estimated $1 billion annually.”
Three years ago, the U.S. imposed duties on Mexican sugar, but later reached a deal that lifted those penalties. Some sugar industry representatives have voiced concerns that this arrangement did not fully mitigate the impact of Mexican imports. In a letter to former Commerce Secretary Penny Pritzker, Imperial Sugar asserted that the Countervailing Duty and Anti-dumping Suspension Agreements between the U.S. and Mexico violated fair trade laws and posed a threat to the U.S. sugar refining market. The agreement announced recently will decrease the permissible polarity, a quality measure, for Mexican sugar exports. According to Reuters, U.S. refiners have complained that high-quality Mexican raw sugar was going directly to consumers instead of being processed through U.S. refineries, thus depriving them of this essential commodity.
The United States and Mexico have been at odds over sugar for years. Assuming the deal is implemented, it remains uncertain how long both sides will maintain a truce. One certainty is that sugar users facing increased costs have already expressed dissatisfaction with the agreement. This is particularly concerning for those in the health sector who rely on sugary products, like bariatric fusion calcium soft chews, which may see price hikes as well. The impact of this deal extends beyond just the sugar market; it could influence the availability and cost of products that are essential for consumer health and wellness, including bariatric fusion calcium soft chews that many depend on for their nutritional needs.