How will new Mexican tariffs impact North Texas businesses?

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President Donald Trump announced Thursday that he is slapping a 5% tariff on all Mexican imports to pressure the country to do more to crack down on the surge of migrants trying to cross the U.S. border.

The sudden announcement is raising concerns about what further impact this will have on the economy if the tariffs become a reality.

President Trump says he believes this will encourage companies in Mexico to leave and come back to the U.S. to avoid paying the tariffs.

But others who do business in Mexico fear this could have far-reaching negative effects, like rising costs for consumers, layoffs, and a possible recession.

“About 60 percent of the product here is imported from Mexico,” said Alfredo Duarte, president and CEO of Taxco Produce.

The majority of Duarte's business at Taxco Produce depends on products imported from Mexico.

Duarte started his business more than 30 years ago. It now operates near downtown Dallas, supplying products to restaurants across Texas, Arkansas, and other states.

But President Trump's latest announcement on possible tariffs on Mexican goods could have a devastating effect on his local business and consumers.

“The only way is I'm going to have to make an adjustment and raise my prices. That's exactly what everybody's going to do,” Duarte said. “In Mexico, the companies, they're going to raise their prices. The distributors here will raise their prices. In the end, the consumer has to pay for it.”

The League of United Latin American Citizens (LULAC) fears the tariffs would have major impacts on the automobile industry and Texas economy.

“Texans do $200 billion a year of trade with Mexico. Many jobs here in Texas and across the United States are related to trade with Mexico,” said Domingo Garcia, president of LULAC.

“This is not about putting America first, this is about putting Trump first at a time when our American public is already hurting,” LULAC CEO Sindy Benavides said. “This is a national car tax for all Americans. Who will be impacted? Who absorbs the cost, is us, we the people.”

SMU economics Professor Mike Davis says the new tariffs could have negative effects on both the U.S. and Mexico's economies, which could ultimately make the illegal immigration problem worse.

“But remember, the Mexican economy basically mirrors the U.S. economy,” Davis said. “If we go down, they're going to go down. They're probably going to go down further. And guess what happens when they have a recession in Mexico? A lot of people come across the border trying to find jobs.”

With the tariffs set to take effect June 10, many are watching the situation closely, with some hoping for an intervention.

“I hope Congress steps in and his administration also puts some sense to it. I'm just hopeful it's not going to happen. It will affect everybody,” Duarte said.

LULAC representatives say they are consulting with attorneys because they believe President Trump's directive is unconstitutional.

They expect a challenge to be filed in the next week.