Mexican Business Leaders Say Border Cities Will Be Impacted The Most By Tariffs

President Donald Trump said the U.S. will impose 25% tariffs on both Mexico and Canada starting February

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Mexican business leaders anticipated that consumers on both sides of the border will have to face price increases if the tariffs set to be imposed by the Trump administration go into effect on Saturday.

Isaac Vega Álvarez, director of Baja's commercial index, told Border Report that cities along the border will be affected the most by the fallout. "It will affect job opportunities and the price of many products will rise," he said.

Vega Álvarez added that the effect won't be immediate, but they will be felt in the short and long term, "particularly in regions heavily dependent on industry." Regardless, all consumers on both sides of the border will be facing increases in the measures go into effect: "Things will have to be overpriced," he said.

Vega Álvarez expressed hope both countries find a way to prevent the trade war as "no one is prepared to deal with the consequences."

Trump set February 1 as a deadline for imposing the 25% tariffs unless Mexico and Canada take steps he deems appropriate to to halt flows of unlawful immigrants and fentanyl into the U.S.

"We have seen a historic level of cooperation from Mexico. But again, as far as I'm still tracking, and that was last night talking to the president directly, Feb. 1 is still on the books," press secretary Karoline Leavitt said this week.

Trump is making the bet that his executive actions can cut energy prices and tame inflation and that the tariffs will strengthen the economy instead of exposing consumers to higher prices, despite economy experts warning tariffs could further raise prices and hurt the economy. At the same time, it remains unclear whether his orders will be enough to foster the growing economy with lower prices that he promised, according to The Associated Press.

The tariffs are set to go into effect less than a week after the standoff between Trump and Colombian President Gustavo Petro. Angered by how deportees were being sent on military planes and with handcuffs, Petro turned back two deportation flights that were in the air and heading to Colombia. The quick dispute, which resulted in various social media posts, ended with threats of tariffs imposed by the U.S. government. A day later, Petro backed down.

But if tariffs end up being imposed on Canada and Mexico, the stakes would be much higher. The two neighboring countries are among the U.S.' largest trading partners, which along with China, account for over $2.1 trillion in annual imports and exports.

Disrupting trade flows within the highly integrated North American economy would be costly. Among its biggest victims would likely be the auto industry.

Automakers ship billions of dollars' worth of vehicles and parts across the U.S. borders with Canada and Mexico everyday, according to The New York Times. In the short run, tariffs on vehicles and parts from Canada or Mexico would lead to higher prices at dealerships and lower demand for cars.

Originally published on Latin Times

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Donald Trump, Mexico
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