“Since NAFTA was approved, we’ve increased exports to Mexico 750 percent.”
Colorado rancher Kevin Ochsner says he voted for Donald Trump, but is concerned about the president’s strong-armed approach to Mexico and call to renegotiate the North American Free Trade Agreement (NAFTA).
“And we start talking about putting tariffs on Mexico, putting up a wall and creating tensions with our second-largest beef import market, that is very problematic to me as a beef producer,” Ochsner said.
“Since NAFTA was approved, we have lost nearly one-third of our manufacturing jobs in the United States,” President Trump said.
Three hundred former Rexnord workers in Indianapolis illustrate the president’s point. The manufacturing company decided earlier this year to move their jobs to a new plant in Mexico, where workers will make $3 an hour.
However, not everyone in the U.S. has fared poorly under NAFTA. Mexico is now the first or second biggest export market for 28 states. American agriculture and the energy industry are doing especially well.
“Here in the west, we are sitting on natural gas because we can’t even develop it because there’s not enough of a market for it.”
New pipelines already under construction are expected to double the amount of natural gas sent to Mexico within three years.
But talk of possibly imposing tariffs on Mexican imports to pay for the border wall has the industry unnerved. Mexico’s secretary of the economy, Illdefonso Guajardo Villarreal, says pressure for retaliatory tariffs would be instant.
“There will be lines from my office to the State of Pueblo of people asking for protection."
Complicating things, each country produces products that have components made across the border.
“In the automotive industry, the aerospace industry, the medical device industry, the high-tech industry and the agricultural sector.”
“I think it’s a little premature for everybody to be pressing the panic button,” Robert Blaha said.
Blaha chaired the Trump campaign in Colorado. He says the president is approaching the Mexican trade issue like a businessman – not like a politician.
But Mexico has its own trump card: corn. The country gets most of its corn from U.S. farmers – something it is now attempting to change by exploring trade deals with South American countries, in addition to increasing its own production.
“I would anticipate a fairly protracted negotiation, the results of which will be good for America,” Blaha said.
A trade war may be far off, with the president’s agenda more than full right now.