SAN DIEGO (Border Report) — On any given weekday, crews from PG Forest Products in Otay Mesa load and prepare 10 to 20 trucks with American and Canadian wood and lumber that is bound for Mexico.
The company, which employees 12 people, has been doing this for about 10 years.
“We send materials all the way down to Cabo San Lucas and the state of Sonora,” said Aldo Morales, the company’s general manager. “We get our wood along the (Interstate 5) corridor from Canada down to Washington to Oregon.
President Donald Trump’s 25% tariffs on Mexican and Canadian products kicked in on Tuesday.
But Morales is worried Mexico will retaliate and institute its own tariffs on items made and manufactured in the U.S.
“First of all, as a consumer I’m worried about it, and as a manager of this business it is definitely a concern,” Morales said. “If there’s a need for a 25% increment in anything, nobody is going to want that, at the end of the day everything bounces back to the consumer, there’s no way there’s any business that can absorb a 25% tariff.”
According to Morales, tariffs must be included in a truck’s manifest detailing the value of the products being hauled including applicable tariffs, which have to be paid to customs at the point of entry into a country.
“You can’t ask them to bill you and pay it later.”
Morales believes almost all businesses will charge their clients the additional 25%, leading to higher prices for consumers, thus, increasing inflation and hurting the economy.
He says those who run companies will look for ways to decrease operating expenses and reducing labor costs.
“We have to wait and see how everything pans out, our workforce is the last piece of our efforts that we want to reduce,” he said. “Obviously, we have to wait and see if there are impacts on the business.”
Mexican President Claudia Sheinbaum has said on Sunday she will announce her country’s own tariffs on U.S. products.
Canada has said at some point it will also implement tariffs on U.S. products.
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