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Produce industry hopes to head off tariffs

But preparing for tariff impact
Posted at 7:26 PM, Jun 04, 2019
and last updated 2019-06-04 22:26:30-04

NOGALES, Ariz. - The threat of tariffs on Mexican imports is closing in.

Five percent tariffs on all Mexican imports will kick in next Monday -- unless President Trump changes his mind or Mexico satisfies him that it's doing more to keep immigrants from crossing the U.S. border.

Now leaders in Arizona's three billion dollar produce industry are preparing to pay the tariffs but hoping to stop them.

An RV from Farmers for Free Trade has been touring the Nogales produce warehouses, trying to build support for USMCA, the successor to NAFTA. But now President Trump is threatening to use tariffs---the opposite of free trade----as a tool to force Mexico to do more to stop Central American immigrants from using Mexico as a passage to the U-S.

So now Angela Marshall Hofmann from Farmers for Free Trade is talking about that tariff threat too.

"And we're really providing a voice for those in the community to express that these tariffs are not what they would like to be seeing imposed on their industry. And the destabilizing effect they would have is what we're hoping to see some in normalization with our trade in North America."

If the Tariffs kick in, a lot of the losses are locked in for the produce growers and the importers. That has a lot to do with newspaper ad inserts for grocery stores. They are decided and printed weeks in advance. The prices are locked and there's no adjusting them for the tariff costs.

But if tariffs persist, companies will get out of the import business worth more than three billion dollars---or they'll raise costs to their customers.

Chris Ciruli of Ciruli Brothers Produce grows produce in several U.S. states but imports Mexican produce too. He says, “I think anytime the public hears that they're going to pay more for products, they, you know, go to their officials and say, Hey, this doesn't make sense, right? You're seeing two to 3% real income growth for people in Arizona. And you're going to see 25% tariffs, how are people going afford that?”

And produce industry leaders say they're heading to Washington, DC to try to convince leaders there, disrupting trade is the wrong way to solve immigration problems.