Could Trump's Border Policies Kill Commerce?

Buying vegetables during the winter can often seem like a deciphering game. Deep-red tomatoes native to cooler climates slowly disappear from shelves as the colder months tide on. It's one of the first hints that snow will soon be on the horizon and the fresh lettuces and green onions from local farms will fade from sight.

But in markets, local summer produce is usually replaced by a cornucopia of choices, all with their own cryptic little signs meant to hint at country (and sometimes state) of origin.

It's the ones that say U.S.-Mex or Can-Mex that I find the most interesting. These labels indicate that although a fruit or vegetable was produced by a company of one country, it was actually grown in another. In flights of fancy, I like to think of that as a sense of partnership between communities: One country offering the ingenuity and resources, and the other providing the manpower to ensure that all of North America stays fed.

In reality, however, I know better. Those "partnerships" are one-sided at best. Mexican tomato-pickers receive a pittance compared to Florida field workers. And even laborers in Florida have become the subject of human rights claims in recent years.

According to a 1996 University California Davis publication, Mexican workers received an average of $3 to $5 per day for harvesting tomatoes that are then shipped to hungry American or Canada consumers.

That's not to say the Mexican government and companies don't benefit. Despite abysmal earnings that many equate to slave labor, Mexico still commands the lion's share of U.S. imports. According to the U.S. Department of Agriculture, 71 percent of imported tomatoes come from south of the border. Over the past decade, that translated to almost $8 billion in revenue.

That surge in production is tariff-free under the North American Free Trade Agreement (NAFTA). And the stories of struggling Florida growers undercut by vast farms in Sinaloa, Mexico, have become an issue of contention for some who see Mexico's economic success as America's loss.

This week President Donald Trump attempted to tie that controversy to another issue of dispute: what he claims are America's porous southern borders. Following up on a promise he made repeatedly during his campaign, Trump affirmed his plan to, once and for all, solve the problem of illegal passage from Mexico.

He'd build a wall -- a $7-million-per-mile wall (roughly $10 billion), for which he says Mexico will ultimately foot the bill.

Not surprisingly, Mexico's President Enrique Peña Nieto declined the offer to pay for the wall.

On Monday, after Peña Nieto cancelled a visit to the White House on the recommendation of his advisors, the Trump administration upped the ante, suggesting that a 20 percent tax could be imposed on Mexico's imports.

While administration later took a step back from that proposal, calling it just one of a "buffet of options," the impact was already being felt in Mexico and along both sides of the U.S.-Mexico border.

Cross-border commerce dipped after the November elections and continues to drop off at the El Paso-Juarez border crossing. And it isn't just the Mexican small businesses that are noticing the dearth of shoppers, writes Dallas Morning News reporter Angela Kocherga.

Kocherga, the paper's Mexico border reporter, spoke with El Paso County Commissioner David Stout in late December -- and his comments pretty much sum up the impact of the detente between the two administrations.

"The shoppers who come over from Mexico are very important, especially for taxing entities," Stout said. By 'taxing entities,' he means the businesses large and small that line El Paso's streets and for generations made a living from cross-border  travel and tourism. "We rely heavily on the sales tax revenue we generate."

Fear of being detained under Trump's more aggressive immigration stance has also helped to stem the flow of what has been for years a cooperative exchange of travelers, high-school students and commerce.

Communities across the Rio Grande River in Mexico's historic Ciudad Juarez have felt the impact as well. Patrick Iber, an assistant professor at the University of Texas, El Paso, recounted some of the economic loss Mexico felt since Trump's election. It is the small, struggling towns along the border that "are failing," and that in turn further diminishes the ability to shop in U.S. businesses across the border.

And while the Trump administration seems to have discounted the idea of imposing a tax on Mexico's imports for now, the proposal still hints at a disconnect between the administration and those most likely to feel the brunt of any fees or taxes.  And towns on both sides of the border could be plunged into a recession if the federal government were to impose a tax on imports from Mexico, said Tom Fullerton, an economics professor at the University of Texas, El Paso,

“It could lead to plant closures in Mexico, and that would lead to factory cutbacks in the United States,” Fullerton said. A 20 percent tax would affect border cities that help shuttle the imports and the workers.

And it would make vegetable imports like Mexico's prolific tomato, avocados, cucumbers and other produce shipments unsustainable. The cost wouldn't just be borne by the Mexican companies that work in partnership with U.S. and Canadian manufacturers, shippers and growers, but by U.S. and Canadian consumers. And as Fullerton pointed out in relation to border cities that rely on that valuable commerce, ultimately, and unsustainable trade "would give Mexico City and Ottawa [a reason] to cancel the entire agreement."

For West Coast communities that rely on that south-of-the-border resource of winter sun and plentiful manpower, the NAFTA partnership may seem disproportionate to an administration that must juggle a U.S. deficit. But for now, tomatoes may well have a lot more barter power than concrete walls and trade wars.

Image credit: Flickr/16:9clue