Experts weigh the impact of proposed U.S. tariffs at first Lone Star Trade Summit
SAN ANTONIO — This article was originally published by our content partners at the Dallas Business Journal. You can read the original article here.
Almost a trillion dollars in trade is tied up in trade with Mexico. While steadily climbing in importance for years, the recent focus from corporations to simplify supply chains has accelerated growth along the border, making it a prime spot for logistics, warehousing and all of the follow-on businesses and amenities that support those ventures.
But the future of this cross-border commerce was put into question with President Donald Trump again ascending to the White House. Trump said he will slap 25% tariffs on all goods coming from Mexico. Mexico’s president Claudia Sheinbaum, new to the post, said the country would retaliate.
When the San Ant onio Business Journal first laid out its plans for the inaugural Lone Star Trade Summit earlier this year, existential threats and uncertainty were not top of mind. Now, with the U.S.-Mexico trade relationship being put under more scrutiny, the gathering took on a new level of importance ahead of Trump’s inauguration.
Business leaders and policy experts spent a recent morning exploring the future of North American trade, how cross-border commerce has shaped the trade industry in Texas and how businesses can weather the coming storm.
The first panel discussed the 30-year legacy of NAFTA and its significance to San Antonio, the USMCA and the importance of cross-border trade. The panelists included:
- President & CEO at United States Hispanic Chamber of Commerce Ramiro Cavazos
- Former Bexar County Judge and Mayor of San Antonio Nelson Wolff
- IBC Bank, Executive Vice President Corporate International Gerry Schwebel
The discussion began with the panelists each reflecting on the signing of NAFTA in San Antonio. Former Bexar County Judge and Mayor of San Antonio Nelson Wolff shed light on its significance to San Antonio and why it was passed.
“We worked very hard for the passage of NAFTA. Now, why did we pass NAFTA? Very clear. We were going to be one of the largest trade blocs in the world, and the purpose of it was to reduce tariffs and trade barriers,” Wolff said. “That was the purpose of NAFTA, so that the three countries together, with San Antonio right in the middle, from the top of Canada to the bottom of Mexico, we were in the perfect position to benefit by this.”
IBC Bank Executive Vice President Corporate International Gerry Schwebel said the leadership San Antonio had in the 90s was timely and contributed to the signing of NAFTA.
“It all boils down to a private, public partnership that felt it important that San Antonio was the place to be back then,” Schwebel said.
The event shifted to address the Trump Administration’s proposed 25% tariffs on all goods imported from Mexico and Canada, and that could alter NAFTA.
“If we change those objectives, we’re going to be in trouble, not only here in San Antonio, but in this country. You’re talking about 25% tariffs, you’re talking about destroying everything that we’ve accomplished in the last 30 years,” Wolff said.
President and CEO of the United States Hispanic Chamber of Commerce Ramiro Cavazos added, “when we talk about tariffs, that’s dangerous to me, because we’ll end up paying those costs, not the companies moving back and forth.”
Wolf closed out the discussion by commenting on the importance of immigration and how it contributes to trade.
“We need immigration. It needs to be a comprehensive review of how we do it and how we make it happen, but immigrants are absolutely important to us,” he said. “Dehumanizing them is wrong. There’s always some bad apples among any bush but we need to get an immigration policy, those go together. Immigration and trade go together. So we need to be working on both of those things.”
The second panel analyzed trade dynamics in Texas and Mexico, policy shifts and economic trends. The panel featured:
- Associate Professor of Finance and Business Analytics at Trinity Eugenio Dante Suarez
- Senior Associate at the CSIS Americas Andrew Rudman
- Director of the Texas Center for Border Economic and Enterprise Development at Texas A&M International University Jose Daniel Covarrubias
The third panel brought together Texas business leaders to discuss cross-border trade with Mexico and what’s at stake from a business standpoint. Featured in the panel were:
- CEO & President of the Texas Association of Business Glenn Hamer
- President & CEO of Texas Economic Development Corporation Aaron Demerson
- General Council at NatureSweet Skip Hulett
As an agricultural company with facilities spread throughout Mexico, Hulett gave a window into the risks of getting into a trade conflict. The ability to raise the standard for treatment of agricultural workers, and to grow the business, is threatened by the uncertainty coming from the next administration.”
“For us, it’s more than just making money,” Hulett said. “For us, the only way this mission, this purpose this dream that we’ve had…is going to work is if we have trade with Mexico that’s fair. That, to be honest with you, is at stake right now.”