EL PASO, Texas (Border Report) – The border has started to feel the pain of President Donald Trump’s tariffs on Mexican imports.
Mexican businesses on Tuesday began factoring in the 25% levy as they filled out paperwork to send anything from car parts to fresh produce to El Paso ports of entry. They then began figuring out how to bill U.S. customers for the added expense.
“Businesses are in panic. They are totally scared of what is happening,” said Marcelo Vasquez, regional director of the Mexican Association of Importers and Exporters. “They had talked about (excluding) some products, but they put tariffs on everything, absolutely everything.”
The immediate losers because of the tariffs that went in to effect on Tuesday are border manufacturing plants under contract to deliver assembled components quickly to U.S. clients. Produce farmers also cannot sit and wait for the levies to go away because their product spoils.
But, eventually, every consumer in the U.S. will pay more for any good made with Mexican or Canadian parts taxed at the border, industry and local government leaders say.
“The maquiladora industry cannot slow down because of their ‘just in time’ schedule. They are sending their shipments to the U.S. with that 25% tariff,” Vasquez said. “The (assembler) will not be paying that, the consumer (in the U.S.) will be paying that.”
Maquiladoras are U.S.-run plants that assemble parts for cars, appliances, computers, medical devices and a host of other consumer products in factories in Juarez, Tijuana, Nuevo Laredo and other Mexican cities.
The tariffs won’t just make your SUVs, computers and refrigerators more expensive; they are likely to increase your grocery bill and the tab on government services, said New Mexico State Treasurer Laura M. Montoya.
She said every major industry in the state – agriculture, health care, housing, energy, aerospace, defense, construction and even film – are linked to trade with Mexico amounting to $2.5 billion a year. Also, nearly one third of all the cattle entering the U.S. from Mexico comes in through the state.
“With medical equipment being one of the main imports from Mexico, we can see health care become more expensive and inaccessible than ever before,” Montoya said. “The cost of construction and housing will also rise as critical materials like steel become more expensive. Our national labs, Sandia and Los Alamos, and our four military bases will face higher costs since they utilize uranium and equipment and machinery imported from Mexico.”
In Arizona, local officials like Sarah Benatar of Coconino County, said the tariffs will make capital improvements projects more expensive for taxpayers.
“Increased costs caused by such tariffs will only increase the costs of procuring goods and services that rely on imported materials,” County Treasurer Benatar said during an online conference. “This is going to put even further budgetary constraints on us, impacting our public projects with delays or even scaled-back projects.”
Is this really about drugs?
In Mexico, President Claudia Sheinbaum has called for a mass rally in Mexico City where she will outline retaliatory tariffs to U.S. imports on Sunday.
Sheinbaum this week questioned what else her country can do to satisfy Trump on the drug and migration issues that prompted the tariffs. Migrant encounters are down to a trickle along the U.S.-Mexico border and Mexico last week flew 29 major drug traffickers to face justice in the United States.
Trump has also cited the trade imbalance between the U.S. and its neighbors to the north and the south as a trigger for the tariffs. Some in Mexico wonder if that’s really the end game of the tariffs.
“I don’t know if you remember 2019, but we have seen this movie before when Trump came up with a 5% tariff per week because of the migrant caravans,” said Manuel Sotelo, president of the Juarez Transportation Association. “We had (National Guard) on the border. If their intent now is to have soldiers check every truck (going into the U.S.) looking for a small vial of fentanyl pills, then that’s the equivalent of a blockade.
“Our president (Sheinbaum) has to be very intelligent to avoid delays to commercial shipments.”
Vasquez said Mexican business leaders are hopeful that a reported scheduled call Thursday between Sheinbaum and Trump will result in at least some of the tariffs being lifted or reduced.
Retaliatory tariffs will hurt Mexicans in the same way Trump’s tariffs hurt U.S. consumers, the business leaders said.
Read: Read More