Trump’s tariff reflects contracts of integration between us and Mexico

When Dennis Nixon began working on a regional bank in Larado, Texas, in 1975, there was just a cross -border trade with Mexico. Now, nearly one billion dollars of trade and more than 15,000 trucks roll every day a quarter of a mile from his office, and link the economies of the United States and Mexico together.

Larido is the most crowded port in America, a car spare parts channel, gasoline, avocado and computers. “You cannot dismantle them anymore,” said Mr. Nixon about the American and Mexican economies. He said that thirty years of economic integration under a free trade deal created “depths and relationships that they do not always understand and measure, until something wrong occurs.”

Now that there is something on the horizon: a 25 percent tariff for Mexican products, which President Trump plans to impose on Saturday as he looks to pressure the Mexican government to do more to reduce illegal immigration. Mr. Trump is expected to hit Canada by 25 percent and impose a 10 percent tax on Chinese imports.

It seems that Mr. Trump has long been supportive of customs tariffs and free trade deals, who is not afraid of raising economic relations in America. It focuses on strengthening the borders against illegal immigration and the flow of fentanel, two areas that they often spoke during his 2024 campaign.

But the president has other beef with Mexico, including the economic competition it offers to American workers. The president and his supporters believe that car and steel imports from Mexico weaken American manufacturers. They say that the United States and Mexico-Canada agreement is the commercial deal signed by Mr. Trump in 2020 to replace the North American Free Trade Agreement, it must be updated-or perhaps in some minds.

Many companies say that the relations between countries are working more deeply than most Americans realize, and policies such as the customs tariff that you seek will be painful. Among all the world’s main economic partners, the United States and Mexico are among the most integrated partners – related to business, trade, tourism, family relations, transfers and culture. It is near to be born sometimes resentment and efforts to rely on the relationship, but also brings many benefits.

“Our country has a symbiotic relationship,” said Juan Carlos Rodriguez, Managing Director of Tijuana in Kushman and Wickfield, one of the largest commercial real estate companies in the world.

Mr. Rodriguez said: “Our economies are so intertwined that it will take decades.” “Such a scenario will have a catastrophic effect on Mexico.”

The huge dependence of Mexico on trade with the United States is at least to the 1960s, when manufacturers began to open factories across the border only in response to the costs of work in the United States and Japan.

The trade was picked up when Nafta entered into force in 1994. For many Americans, this commercial agreement is now synonymous with the cities of the factory abroad. but Economists count Many parts of the United States have benefited with the increase in the agreement on commercial and economic activity.

Other parts of the United States, such as parts of the industrial northwest, were severely harmful as manufacturers moved to Mexico in search of cheaper workers. With the cavity of the cities of the factory, the matter ended with feeding a violent commercial reaction, which helps to pave the way for the anti -Master candidates such as Mr. Trump to win the position.

In an interview, Peter Navarro, the chief adviser to the President of Trade and Manufacturing, described Nava as a “disaster” of both Mexico and the United States.

“The fact of the matter is that China was so worse that people tend to forget how bad NAFTA,” he said.

In his first termMr. Trump threatened customs duties on Mexico due to border issues, but instead settled in a deal. It is too It threatens again and again To withdraw from NAFTA, but instead decided to re -negotiate it. His advisers added rulings to the agreement that they believe will strengthen us from steel and manufacturing cars, but some say now that they are short.

Since Mr. Trump was the last time at the White House, Mexico has grown the American economy. Covid-19 Episod to the global supply chains and began a “near” boom.

Companies were already looking to leave China, to avoid the definitions imposed by Mr. Trump there, in addition to high costs and political risks. Manufacturers rushed to open the plants in Mexico, seize the low -cost industrial base in the country and close to the United States.

These changes helped make Mexico the United States Better commercial partner in goods In 2023, with the expansion of trade between countries, as well as the bilateral trade deficit with Mexico, a measure on which Mr. Trump focuses in particular.

American consumers may depend on foreign products as it has always been. But economists argue that imports from Mexico can have completely different effects on the American economy from imports from China.

This is because there are many integrated supply chains that work back and forth across the border of North America. Goods such as cars, electronics and Bluez are settled back and forth between the United States, Mexico and Canada, where they are converted from raw materials into parts and then final products.

According to the economists of the S& P Global, from imports coming to the United States from Canada and Mexico, more than 18 percent of its value in the United States was created, before sending them to those countries. This is much more than the proportion of other countries, and a sign of the integration of economies.

Proximity creates other benefits: search by Federal Reserve in Dallas I have found that a 10 percent increase in factory production in Siodad Khwariz, Mexico, leads to an increase of 2.8 in the total employment in El Passo, Texas, which is concentrated in areas such as transportation, retail and real estate.

“There is this perception that the borders revolve around the walls and illegal crossings,” said Diego Solorzano, the founder of DESTEIA, who helps companies make supply chain decisions. “This line in the sand is actually the strongest economic corridor on the ground.”

Mr. Solorzano said nearly $ 800 billion of goods was transferred across the border last year, an amount that would set the border between the United States and Mexico at an amazing distance from the 20 largest economies in the world.

The two economies depend on each other to meet their energy needs. Mexico, which Dependent on On the United States, for an estimated 70 percent of its consumption in natural gas, it is more likely to do any disorders.

But the United States also imports about 700,000 barrels of crude oil per day from Mexico. Energy analyst warns that imposing import taxes on such goods can lead to fuel prices, especially diesel.

Food production has been closely combined. Mexico supplies nearly half of the fresh fruits and vegetables in America, and this percentage It rises in the winter months. Mexico also appeared last year as the best American agricultural export market, with a total of $ 30 billion.

Bob Heimisath, a fifth -generation farmer in the northeast of Iowa, said Mexico was the largest American atom buyer and a large buyer of pigs, both of which produced it.

Mr. Heimisath said the tariff “will put an additional cost on a product that does not need to be there, and will lead these countries to go to another place.” He spoke over the phone from his farm on an unreasonable warm day, as he just finished washing the salad park.

“This puts me as a farmer in an economic situation,” he said. “Although I understand the desire to use customs tariffs as a negotiating tool, what is the damage to it?”

Some Trump officials believe that corn exports were not completely benign. Mr. Navarro said that NAFTA has started the problem of illegal immigration in America, because when the United States began exporting the atom to Mexico after it entered the commercial charter, which removed the Mexican agricultural workers from jobs, and sent some to the United States.

“This is the place where that began, the problem of illegal immigration,” he said.

Commercial irritants

Mr. Trump and his supporters have other criticism of the relationship of the United States and Mexico. Some argue that Mexico has violated the terms of the agreement that it clarified to reduce steel exports to the United States. They say that Mexican shipments from steel to the United States exceeded the levels that this agreement has set, which was signed alongside USMCA

(Mexican steel industry has its own complaints. On Tuesday, Canacero, a Mexican steel organization, claimed a significant increase in final steel products exports from the United States that did not comply with the agreement.)

There are also increasing concerns about Mexico’s trade with China, especially in the automotive sector. Chinese car exports rose to Mexico, and some Chinese car companies were exploring the sites of Mexican factories.

This has led to fears that Chinese companies will use Mexico as a starting point for export to the American market at much lower tariffs than if shipping from China was.

Brad Ciser, an economist in the Council of Foreign Relations, said that the role of Mexico as a channel for Chinese goods for the United States has been exaggerated, but “there is definitely a problem in the auto sector.” He said that one in three cars sold in Mexico last year came from China. This means that Chinese exports now meet the Mexican demand for cars, instead of exports from the United States, a blow to the American auto industry.

Other business owners argue that the United States and Mexico should work together to reduce imports from China – but they say this does not require a high tariff for Mexican products.

Chrrill Officer, CEO of Sherrill Manufacturing, a Sherrill tool manufacturer, New York, said he wants to see structurally structured definitions in a way that prevents China from using Mexico Kebab back to the United States. But he opposes the definitions of Mexico directly, saying that China is a much greater threat.

He said, “China expresses a factory in Guangzhou, as it creates a store in Mexico only to circumvent the tariffs – that must be dealt with,” he said. “But you cannot destroy your trade relationship with Mexico.”