Donald Trump
Trump tweet praises sugar pact with Mexico as "sweet deal," but is it really? Reuters

It's refreshing to see how the president of the United States, Donald Trump, writes something kind about Mexico for once. After accustoming his followers to tweets about violence, drugs or the border wall, Trump changes his words and includes "very good" in the sentence.

"New Sugar deal negotiated with Mexico is a very good one for both Mexico and the U.S. Had no deal for many years which hurt U.S. badly," wrote Trump.

However, this "sweet" agreement is intended to prevent Mexico from dumping cheap sugar into the U.S. Market, according to The Washington Post. The agreement was announced on June 6 by the Secretary of Commerce, Wilbur Ross, and Mexico's Secretary of Economy, Ildefonso Guajardo, and it's likely to be formally signed soon.

The Associated Press reported that American sugar refiners complained that Mexico was exporting low-cost refined sugar to the United States. U.S. sugar producers estimate they have lost more than $4 billion because Mexico has been flooding the market with subsidized sugar. The conflict began in 2014, prompting US authorities to investigate imports by calling the action unfair.

The deal increases the price at which raw and refined sugar is sold to Mexican mills and reduces Mexico’s refined sugar exports to the United States. In return, the U.S. agreed to suspend duties on Mexican sugar imports.

"America’s sugar producers thank President Trump and his team for defending U.S. jobs, supporting America’s sugar farmers, and holding Mexico accountable for breaking U.S. trade laws," said Phillip Hayes, spokesman for the American Sugar Alliance, the industry trade group.

Economists Daniel Pearson, however, had a different point of view. "It is a really poor deal for consumers and sugar-using companies. They’re going to pay a higher price."

Looking at the bright side, had this issue not been resolved, it could've ended up in a trade war with Mexico if the U.S. had imposed duties on their sugar imports. It could've jeopardized plans to renegotiate NAFTA, the 23-year-old trade agreement involving the United States, Mexico and Canada.

The sugar deal "clears away an issue," said Joshua Meltzer, senior fellow at the Brookings Institute. "It smooths the politics a little."

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