Keeping up with the opening salvos in the trade wars.
DALLAS — Importers and exporters here and in Canada and Mexico are now trying to figure out from one month to the next—and even one day to the next– if they can get their shipments between the countries without the dreaded added taxes.
Just last week, President Trump added steep new taxes to Mexican and Canadian products. Then, Canada began charging reciprocal tariffs on American goods. Then, the Trump tariffs were removed for certain items. And then he postponed a big chunk of the taxes altogether for another month. All that happened in just two days. And there were more gyrations that followed.
As it played out, some truck traffic at the Texas-Mexico border thinned out as producers in Mexico held back many of their products to wait out the Trump tariffs, says McAllen trade facilitator Jorge Torres of Interlink Trade Services, “In Mexico, they’re not shipping, to see first of all, if (the tariffs) are going to go away in the next couple of days…or two: Until they figure out a plan, how to mitigate or reduce the financial exposure”.
So, when the Trump tariffs were quickly suspended, that paid off for shippers who sat on the sidelines and, quite possibly, for consumers here as well.
We get a lot of stuff from Canada. And we import even more from Mexico (and most of that comes in through Texas).
Even if Mexican exporters just hold back their shipments temporarily, we can quickly see emptier shelves and inflation just from that. And certainly, if they send their shipments through the border and are forced to pay tariffs of 25%, costs for consumers here can rise rapidly.
One example we gamed out with Torres: An average truckload of Mexican avocados that comes here from Mexico. He estimates, “A load can go $80,000 to $100,000.” If you add a 25% tariff on top of that, the shipment could cost $125,000 to bring into the country instead of the $100,000 you might have paid before. Costs like that are likely to be passed on to American consumers who eventually buy those avocados.
Torres says that with many of the Trump tariffs now paused, importers and exporters will likely move as much product as possible between the countries. But he says the uncertainty that still lingers is dreaded by businesses.
That sentiment is echoed by Arlington Mayor Jim Ross, whose city is home to a huge General Motors assembly plant, 5,200 GM jobs, and a lot of questions about how all of that could be affected by auto and auto parts tariffs, “That uncertainty or the threat of it all is certainly problematic”.
See our full tariffs conversation with Torres and Mayor Ross in our latest episode of our Y’all-itics Texas political podcast below.
