Torres: Border region will suffer the most from Trump’s tariffs

5 days ago 44

MCALLEN, Texas – The U.S.-Mexico border region is going to be the biggest loser should President-elect Trump implement 25 percent tariffs across the board on goods and services imported from Mexico.

This is the view of Jorge Torres, a customs broker with 30 years of experience in the import-export sector.

The president and founder of Inter Link Trade Services sat down for an in-depth conversation about tariffs with the Rio Grande Guardian International News Service.

Asked if the border region will be the biggest loser if Trump carries out the threat that he first made on the presidential campaign trail, Torres said:

“Yes, the border region, with cross border activity, custom brokers, transportation, warehousing, distribution… if these tariffs are implemented, we’re going to see a decrease in trade. There’s no way around it. How much, we don’t know, but it will represent a reduction in border crossings, in warehouse space requirements. So, we will be impacted by this.”

On the campaign trail, Trump said he would impose 25 percent tariffs across the board on Canada and Mexico. He wants these countries to do more to stop undocumented immigration and drugs entering the United States. He has reiterated his intention to impose tariffs since his election victory.

Asked how big a deal it is for his industry, Torres said:

“It is going to have a huge economic impact. Twenty-five percent is very high. He (Trump) tried it when he was president before, and with (President) López Obrador, but they didn’t go through. They worked it out. So, we’re hoping that something’s going to be worked out. But a lot of companies are very, very worried about these tariffs. So, it is, it is a big deal.”

Asked what he is hearing from companies in the import-export sector, Torres said:

“A lot of them are very concerned. I have met with several of my customers and other companies to see… obviously their question is, are they going to be implemented? How is it going to impact us? For how long? Those are all unknowns. We wish we had a crystal ball, but unfortunately, it’s hard to decipher what’s going to happen after January 20.”

Torres said he has been recommending his customers implement measures to mitigate some of the economic impact and supply chain impacts that tariffs can have.

“Obviously, there are different measures. They’re not going to eliminate the tariffs that are implemented, but they might assist a little bit in minimizing their impact.”

Asked what measures he has in mind, Torres said:

“Well, for example, make sure they use proper valuation if they’re going to go buy commodities. Assure that they have the proper tariff classifications under products, proper valuation, use Foreign Trade Zones. There are ways to mitigate… but it is going to be interesting, it is going to be complicated.”

When Trump announced he would be introducing tariffs, economists from all stripes warned that the big loser would be the U.S. consumer, because price increases would be passed on the consumer. Trump disputed this. He said the country the goods are coming from would pay the price. Asked about this, Torres said:

“Pretty much, I think everyone is in disagreement with President Trump. He’s saying that the exporting country, the producer, is going to pay for it. That’s not true, because the importer is the one that pays the tariffs. Now they can negotiate pricing with the producers, exporters from China, for example, to reduce pricing. So, that might reduce the tariff. But in reality the importer pays that price.”

Torres said the importer could decide to reduce their profit margins. But, he said, that would not be enough to offset a 25 percent tariff.

“At the end of the day, the consumer is the one paying those tariffs. And, in a lot of cases, these tariffs are implemented to help certain industries, for example, the aluminum or steel industries. Well, if they’re implemented on those products, the aluminum and steel industry, sometimes they say, well, they’re paying this tariff, so I can increase my pricing too. So, at the end of the day, it is an inflationary factor, and the consumer will pay the price.”

Asked if the threat of tariffs is just bravado from President Trump, a negotiating tactic to get more concessions from Mexico and Canada on immigration, illegal drugs, etc., Torres said:

“I think that’s a big part of it. He (Trump) has his book, The Art of the Deal. And, like I said, he used this (tactic) before with Mexico. Back then it was a five percent tariff. His goal is to have Mexico stop illegal immigrants, and drugs, stop the cartels. So that’s his ultimate goal, to use this as a negotiating arm, to have Mexico implement measures to reduce or eliminate that.”

Torres noted that Trump has had conversations with Mexican President Claudia Sheinbaum.

“I think there are a couple of comments that he made where he sees that Mexico is doing something about it. I think they stopped a big fentanyl shipment in Sinaloa. They stopped a big (migrant) caravan. The encounters at the border have been reduced. From a Canadian standpoint, (President) Trudeau already had dinner with him (Trump) at Mar a Lago, and he (Trump) is even saying that he wants Canada to be the 51st state and make Trudeau governor. So, I think Canada pretty much caved in to what Trump wants. Mexico is still going to be a challenge, but they’re getting there. So, our hopes are that with this, no tariffs will be implemented.”

In the podcast, Torres said the other big agenda item is a review of USMCA in 2026. He notes that unlike its predecessor, NAFTA, USMCA does not include the words ‘free trade.’

“They took away the word ‘free’. So, it (USMCA) is not necessarily a free trade agreement.” So, Torres said, USMCA would not automatically blow up if the tariffs were imposed.

“The president has the right, by executive order, to implement tariffs if he sees there’s a national security threat or anything impacting the economy. So, he has ways and means to do it. He doesn’t need Congress approval, and USMCA doesn’t restrict him from implementing this (tariffs).”

Editor’s Note: Here is the Rio Grande Guardian International News Service’s podcast with Jorge Torres: