Fernanda Figueroa
With a 25% tariff on imports from Mexico and Canada coming into effect Tuesday, Hispanic-owned businesses and businesses relying on cross-border trade are already preparing to pass higher prices to consumers and cut imports significantly.
The outlook for the North American trade war has already plunged the global economy into chaos, tumbling consumer trust, inflation has worsened, and the automobile sector and other domestic manufacturers have endured a recession.
Trump dismisses concerns that tariffs will be paid primarily by consumers at higher prices, saying, “it’s a myth.”
The stronger US dollar could offset some of the costs, but most economic modeling shows that tariffs will effectively be billions of dollars in tax cuts across the country. Along the border, the reality is that prices have already risen in anticipation of Trump’s announcement, and now there is far more confusion looming.
Chamberlain Distributing represents nine different Mexican farming companies that ship around 5 million boxes of produce each year through Nogales, Arizona, and told US owner Jaime Chamberlain’s nationwide foodservice customers that will raise customer prices for all the products he imports starting Tuesday.
And if record importers lack the resources to pay these higher prices, Chamberlain said they cannot support farmers for more than a week. They have to sell at a loss or at all. Not everything is sold in Mexico, he said. Tomatoes, peppers, cucumbers, beans, squash and other perishable vegetables are left in two warehouses across the fields and borders.
He predicts a similar dilemma across the industry. Supply of agricultural products coming into the US will decrease and prices will rise.
Since January, retailers have been seeking an impact on the final line. Raul Lewis, who owns Villia Chario Mexican restaurants in Los Angeles and Fort Worth, Texas, said the restaurant already stocks up resistant products in anticipation of rising prices.
But Lewis can’t do it with his meat and fruit from Canadian and Mexican suppliers. And in event catering, he cannot offer a set price to his clients, as he doesn’t know what things will look like in a few months.
His restaurant already uses a menu with no price, so he can reflect the cost changing quickly without printing new costs. He is also considering reducing menu options to avoid expensive ingredients. Closed either place is out of the question, he said.
“We need to find ways to be more efficient,” Lewis said. “We’ve learned from the pandemic that we have to spin things around differently and do that, and most of our customer base understands that.”
Small businesses are particularly vulnerable, said Ramilo Cavazos, CEO of the US Hispanic Chamber of Commerce.
“They don’t have the operating revenue that big companies have,” Cabazos said. “Small businesses will be on the forefront of having to pay those costs. They have no choice but to pass those costs to consumers.”
Arizona benefits from $20 billion in trade across its border with Mexico. This is an economy under current stress, said Vanessa Nielsen, a spokesman for the Arizona-Mexico Commission.
In fact, Mexican businesses have already raised prices in anticipation of Trump’s tariffs, and “these prices will ultimately be passed on to consumers,” she said. “Companies, they want to have some certainty, so they’re raising them now in case there’s tariffs and they’re already prepared.”
The supply chain is currently vulnerable, border relations are tense, and she said high prices are particularly concerned about living south of the border and coming to Arizona to buy groceries. The tariffs “will have a weakening effect on these communities at borders that rely on traffic from Mexico and vice versa.”
Trump also increased the minimum tariffs on all steel and aluminum imports from 10% to 25% earlier this month. This could make homes more expensive and harm the already low profit margins of small businesses, said George Carrillo, CEO of Hispanic Construction Council.
Carrillo said the construction business can stockpile steel to some extent, depending on revenue and space. The fear is that future projects will be delayed as prices change.
“Hispanic businesses, they’re usually trying to be more competitive than big companies, so they haven’t been able to lower the market,” Carrillo said. “Now they have options. Do you want to tell the consumers this or do you eat this yourself?”
Original issue: March 3, 2025, 5:08pm EST
