CULIACAN, Mexico — Tomato exporter Sergio Esquer Peiro spent much of Friday in hastily called meetings with other stunned growers, trying to evaluate the potential fallout of U.S. President Donald Trump’s threat to slap coercive tariffs on all imports from Mexico.
The sudden announcement caught observers on both sides of the border by surprise and prompted President Andrés Manuel López Obrador to dispatch his top diplomat to Washington for talks seeking to head off the proposed tariffs.
Obrador said Mexico won’t panic over the threatened hike, but economists and those whose livelihoods depend on the trade relationship worth hundreds of billions of dollars a year worry that stiff duties could have dramatic, negative consequences and potentially spark a trade war between the neighboring countries.
Already, Esquer and other exporters were having to contend with a 17.56% tariff on tomatoes imposed after Washington announced in March it was ending a longstanding agreement over alleged Mexican dumping of the fruit. If the new duties do take effect, Esquer is looking at another 5% being slapped on his products — potentially increasing to 25% in subsequent months — unless Mexico does more to stop illegal migration through its territory by a June 10 deadline per Trump’s demand.
“Right now more than anything there is a reaction of disbelief with everything that is going on,” Esquer, who’s been sending tomatoes and other crops to the United States for 60 years, told The Associated Press by phone during a break in the meetings.
“It also goes against the spirit there is between both countries, the agreements we have, the bilateral trade we have, which is very successful,” Esquer continued. “On the other hand, we’ll have to wait for the reaction of U.S. exporters to Mexico, because they are also going to see their exports threatened if Mexico launches some kind of mirror policy.”
From berries and automobiles to machinery and household appliances, all of Mexico’s exports stand to be hit with the tariffs. Avocado growers in Michoacan, electronics factory workers in Tamaulipas, across the border from Texas, auto parts exporters, all would feel the pinch. Esquer, who does business from the tomato-growing northwestern state of Sinaloa, said it’s not just businessmen who stand to lose, since Mexico’s estimated 700 tomato exporters are responsible for directly generating some 450,000 jobs. According to Mexico’s Agriculture Department, last year some $2 billion in tomatoes were exported to the United States, second only to tequila and ahead of avocados.
The threat also throws into question the future of the USMCA trade deal between the U.S., Mexico and Canada, hammered out in months of contentious negotiations as a replacement for the North American Free Trade Agreement.
Trump’s threat came the same day Mexico announced it would begin the process of ratifying the USMCA and less than two weeks after it successfully negotiated the lifting of U.S. steel and aluminum tariffs that had been a roadblock to final approval for the trade deal.