Tariff Tactics

AIM Media Texas newspapers, The Monitor, Valley Morning Star and Brownsville Herald, partnered to produce a series of stories gauging the impact on the Rio Grande Valley if President Trump would gone through with his threat to impose a tariff on Mexican goods. Interviews for this story were conducted prior to the president’s announcement late Friday that the U.S. had reached a deal with Mexico to suspend the tariff in exchange for Mexico helping stem the flow of Central American migrants crossing the border. The results showed a region bracing for impact, and the bipartisan opposition the president’s threat quickly amassed.

McALLEN — The Rio Grande Valley produce industry dodged a bullet late Friday night when President Trump announced that the United States had reached a deal with Mexico, saying the country would ramp up immigration enforcement on Central American migrants in exchange for the U.S. backing down on threats to impose a 5% tariff on Mexican imports that was set to begin Monday.

The trade community, especially in South Texas, was worried about the tariff, which the president said would increase incrementally, reaching 25% by Oct. 1 unless Mexico took satisfactory steps toward stopping the immigration of Central American migrants through Mexico.

Trump appeared to be satisfied Friday night in announcing the deal, a great relief for many Republicans in Congress who spoke out opposing the tariffs, including both Texas Republican U.S. senators. But in recent days, as talk of the tariffs reverberated throughout the trade world, those in the Valley weren’t sure what the future would hold.

Wearing a thick jacket and disposable gloves, burrowed behind a loading dock inside a frigid sorting room full of vegetables, Manny Perez took a brief break from working on the imported produce Thursday.

There were 18-wheeler tractor trailer trucks constantly pulling up with fresh produce from Mexico, unloading it for another pickup later that would take the goods elsewhere in Texas and the United States, a routine that has repeated itself for decades.

Yet people just like Perez, at his C-46 dock, and the dozens of others at the McAllen produce terminal in the southern part of the city, didn’t know what was coming, a striking unfamiliarity that hasn’t existed at the produce terminal, workers there said.

While Trump’s tariff threats may have been a negotiating tactic with Mexico, it didn’t feel that way for Perez and so many others in the trade industry in South Texas, their livelihood depends on trade.

A worker ices a load of produce from Mexico before it is shipped out of the McAllen Produce Terminal on Friday in McAllen. (Delcia Lopez | dlopez@themonitor.com)

“We don’t even know what will happen,” Perez said, shrugging, about the tariffs, adding that he was “worried.”

“Everyone is talking about it. But no one has told us what these tariffs will do for us,” he said.

For their part, the members of Congress who represent the Valley in Washington have not been quiet about their disapproval.

“Trump’s declaration of 5% tariffs on products imported from Mexico as a migration bargaining chip is clearly insane, but in no way surprising,” U.S. Rep. Filemon Vela, D-Brownsville, said following Trump’s tariffs announcement. “This is one more erratic and nonsensical action from an accidental President whose approach to problem solving is to create a problem to extort a solution.”

“Levying tariffs against our most important trading partner would be irresponsible, fail to achieve the president’s desired result, and hurt American consumers in the process,” U.S. Rep. Vicente Gonzalez, D-McAllen, also said after the initial announcement.

“A tariff on Mexican imports would pose a threat to our economic interests,” said U.S. Rep. Henry Cuellar, D-Laredo, at the time. “Mexico is our number one trading partner, composing 15% of our country’s total trade. A tariff on our largest trading partner will have significant consequences to our economy.”

Green onions shipped in from Mexico wait to get shaved ice for transport north on Friday, June 7, 2019, in McAllen. (Delcia Lopez | dlopez@themonitor.com)

U.S. Sens. John Cornyn and Ted Cruz have not been quiet either, with Cruz telling reporters this week that “there’s no reason for Texas farmers and ranchers and manufacturers and small businesses to pay the price of massive new taxes.”

Cornyn said: “We’re holding a gun to our own heads.”

And yet, Trump’s announcement put those tariff concerns to bed. At least, perhaps, for the weekend.

“I am optimistic that this announcement will bring confidence back to Americans,” Cuellar said Friday night.

More in this series

For local companies, Mexico tariffs open can of uncertainty

Tariff reversal allays economic experts’ fears