Even with deal, Trump’s tough tariff talk could be reshaping the views of auto suppliers along border

By June 13, 2019Uncategorized

For more than 30 years working on both sides of the border, Alexander Sierra has valued a sense of routine. He’s in the automotive industry, the crown jewel of U.S.-Mexico trade, where cross-border supply chains operate with precision.

But uncertainty looms for suppliers here even after President Donald Trump tweeted that he had reached a deal with Mexico. He said he’s suspended, for now, imposing tariffs on all Mexican products after Mexico agreed to do more to crack down on migration from Central America. The plan had sparked an outcry from business leaders and many in the president’s own party, including Texas Gov. Greg Abbott.

Indeed, the newest agreement hardly assuaged Sierra’s concerns. Even before the deal was announced Friday, Sierra said, the damage had been done. He and other auto industry suppliers were already trying to figure out how to coexist with a president who calls himself the “tariff man” and is willing to use the strategy as a diplomatic whip even if it stings U.S. manufacturers and consumers.

Recently Sierra, plant manager at Detroit-based Acme Mills, walked through his border warehouse and distribution center on the edge of Texas and pointed to U.S.-made material from North and South Carolina awaiting transfer to Mexico. Once there, it will be assembled into seats for cars and trucks, including Toyota. Much manufacturing, particularly automotive, relies on inventory ordered just in time to increase efficiency and lower costs. Any future tariffs could raise the price for new autos by thousands of dollars because so many parts and materials go back and forth across the border and would be subject to tariffs each time they crossed into the country.

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