Trucking Industry Caught In The Middle Of Trump's Tariff Threat On Mexican Imports

Nearly 47,000 Americans work in trucking-related jobs supported by cross-border freight movements with Canada and Mexico. A significant number of jobs could be impacted by President Donald Trump's latest tariff threat on all Mexican imports.

President Trump said he will begin a series of escalating tariffs on all Mexican imports on June 10 unless the country and U.S. lawmakers stop the influx of migrants crossing the border.

Tariffs would start at 5 percent in June, then would increase to 15 percent in August. The percentage would then jump to 20 percent in September and spike to 25 percent in October.

In response to President Trump's tariff threat on Mexican imports, the American Trucking Associations (ATA) urged the White House and Congress to "support free, open and fair trade between our country and our closest neighbors."

The ATA said in a May 31 statement, "Trade is critical to the trucking industry, which moves $720 billion worth of goods across our borders with Canada and Mexico annually."

The Owner-Operator Independent Drivers Associations didn't directly address President Trump's new tariff threat, but said it is closely watching the possible impact it may have on the proposed new trade agreement between the U.S., Mexico and Canada, known as USMCA. His proposed deal would replace the North American Free Trade Agreement (NAFTA), but may be in jeopardy as a result of his latest tariff threat against Mexico.

"We remain hopeful Congress will take the necessary steps to implement it [USMCA]," OOIDA said in a statement to FreightWaves. "And without question, we oppose any political tactics from either party that would undermine its swift approval."

The latest tariff threat would only punish American businesses and consumers, said the National Retail Federation (NRF) in a statement on Friday.

"The growing tariff bill paid by U.S. businesses and consumers is adding up and will raise the cost of living for American families," said David French, senior vice president of government relations at NRF. "Forcing Americans to pay more for produce, electronics, auto parts and clothes isn't the answer to the nation's immigration challenges, and this certainly won't help move USMCA forward."

A 5 percent tariff would have "little or no impact on cross-border trade," Joe Rajkovacz, director of governmental affairs for the Western States Trucking Association, told FreightWaves.

"I also question if this isn't just some sort of negotiating tactic," he said. "President Trump seems to say a lot of things that never really come to pass."

President Trump has repeatedly used tariffs or the threat of tariffs as a negotiating tactic with countries including China, the European Union and Canada.

The threat of tariffs on Mexican imports could potentially hurt the automotive industry because approximately 2.7 million vehicles built in Mexico were sold in the U.S. last year, according to the International Trade Association.

However, an executive with Adcock Brothers, a car hauling company based out of Manheim, Pennsylvania, said if tariffs were imposed on new cars coming out of Mexico, it could boost used car sales. Adcock transports both new and used vehicles.

"The more used cars sold, the more transport opportunities," John Blobner, senior vice president of logistics for Adcock, told FreightWaves. "Where I see the growth side of the business is on the used side."

The wholesale used car market currently has about 45 million cars in the marketplace, Blobner said.

"If the prices of new cars go up and new car sales decline, used car sales increase, which means there are used cars to move and there's a little bit more price elasticity on that side," he said.

Image Sourced by Pixabay