- Trump's tariffs on goods from Canada and Mexico begin on Saturday.
- Local reactions highlight concerns over rising grocery costs.
- Key items imported from Canada and Mexico include produce, vehicles and medical equipment.
- Omaha Tropical Market is faced with tariffs as they import large amounts of produce from Mexico and Canada
BROADCAST TRANSCRIPT:
President Donald Trump tariffs on Canada, Mexico, and China go into effect Saturday. Omaha small businesses that rely on imported goods fear what may happen to their inventories and sales, after prices hikes kick in.
Victor Ful owns and operates Omaha Tropical Market at 72nd and Grant Street, he says his store offers a piece of home to people that immigrated to the United States.
“The food is not only what goes in your stomach, its nostalgic it's psychological it's a mental thing…because when you do that when you eat that you get back to your roots,” said Ful.
Ful works directly with wholesalers and buys much of his nonperishable items in bulk so, inflation has not had much of an impact on his business.
However, the 25% tariffs President Trump is imposing on Mexican and Canadian goods could hurt his business and his customers pockets.
“It's going to be a price increase because the only way we function is we got a margin, that we have to markup that we must use to survive or get a bare minimum. So that what that would do is it might reduce the volume of sales,” said Ful.
Ful's customer base is largely made up of immigrants who shop the wide variety of international options at the tropical market. Plantains are a staple, Ful expects items like this, that you cannot find at chains, to be hit the hardest.
Though some neighborhood small businesses are bracing for impact, Creighton University Director of the Institute for Economic Inquiry Dr. Ernie Goss says tariffs can be a good thing.
“If it's to negotiate, if it's in negotiations, in other words, get them to reduce their tariffs, them being Canada and Mexico, then perhaps it's good,” said Goss.
If they’re used as a tool for negotiation, President Trump could get Canada and Mexico to reduce their tariffs on American goods. Bit, if the tariffs on imports are put in place, Goss fears they could be retaliated against.
“Nebraska's number one export market for corn, for example, and agricultural goods, I should say, is Mexico. Well, she [Claudia Sheinbaum] can put up tariffs of US goods, agricultural goods, for example, going into Mexico, that would invite further retaliation, tit for tat. We would all suffer for that,” said Goss.
Goss said the impact is dependent on the elasticity of the market. So, if there is a 25% tariff put on Mexico, produce like avocados will get more expensive once the current inventory reduces.
If the consumer decides the price of avocados or products associated with them like guacamole is too high, then they’ll stop buying it. Consumers only carry the burden of what they purchase and wholesalers in the United States will bear the rest of the cost. Eventually the demand will drop, farmers in Mexico and grocery stores like Omaha Tropical Market could see lower revenue.
“These men and women, families out there getting hit with egg prices, beef prices, grocery prices, electricity prices. Now we're all being hit, but not to, not as a share of income. We, we got to be very careful here because this, this could have a much more of a negative impact on those individuals who have suffered more because of this slow growth US economy and slow growth global economy,” said Goss.
Avocados aren’t the only thing the U.S. imports from Mexico, in fact it’s not even in the top five. Vehicles, electrical machinery, nuclear reactors, mineral fuels and oils, and medical equipment are the top imports from Mexico according to U.S. Import Data.
Similarly, the United State relies heavily on Canada for mineral fuels, vehicles and auto parts, machinery, plastics, and precious stones, pearls and metals which can be found in your kitchen counter tops.
Economists also believe these tariffs are in violation of what was NAFTA, now the United States-Mexico-Canada Agreement, put in place by President Trump in 2020. The Office of the United States Trade Representative says the agreement “creates more balanced, reciprocal trade supporting high-paying jobs for Americans and grow the North American economy.”
Some key components of the agreement listed by the USTR are:
- Creating a more level playing field for American workers, including improved rules of origin for automobiles, trucks, other products, and disciplines on currency manipulation.
- Benefiting American farmers, ranchers, and agribusinesses by modernizing and strengthening food and agriculture trade in North America.
- Supporting a 21st Century economy through new protections for U.S. intellectual property and ensuring opportunities for trade in U.S. services.
- New chapters covering Digital Trade, Anticorruption, and Good Regulatory Practices, as well as a chapter devoted to ensuring that Small and Medium Sized Enterprises benefit from the Agreement.
“It does, it does undermine the agreement, and again, that's one of the big, big issues here,” said Goss, “If you do go down that road, you could have retaliation and everybody would, it would cost everyone that's consumers in Mexico, consumers and producers in the US,” continued Goss.
Not only could impacts be felt in grocery stores and local restaurants but, at the auto dealership. Goss believes the tariffs are largely targeted at the auto industry, to reduce competition and bring manufacturing jobs back to the U.S.
“I think the, the target for President Trump is these automobile parts and automobile bills coming across the border, attempting to move those, get that production to move to the US,” said Goss.
Goss says this pressure is unnecessary and our country is better off if we work with Canada and Mexico.
“Guatemala is better off for the selling us bananas, and we're better off selling corn in Mexico. It's, it's a pretty easy concept,” said Goss.
Cod and tilapia are an extremely important part of many African meals. Ful says he imports fish from Canada because he trusts that they weren’t raised in tanks.
“We choose Canada because we give them better benefit of the doubt to the quality,” said Ful.
Ful told KMTV, he orders new shipments every week. This week’s order was placed before the Trump tariffs were implemented, so he won’t know the exact financial impact until next week.
