DALLAS (CBS11) – He wants to build a wall and tax anything imported from Mexico to pay for the structure. But President Donald Trump’s plan could end up costing consumers and jobs, according to an SMU business professor.
Tex-Mex restaurants like Herrera’s Café rely on items like Mexican produce, beer and soda. Every dish that hit the table has a little piece of Mexico inside.
“Tomatoes, jalapeños, onions, avocados. Those are our main ingredients,” said Felipe Villasenor, a manager at Herrera’s Café.
When he heard about President Trump’s idea to implement a 20 percent tariff on imports from Mexico, he already started thinking about every price on his menu going up.
“Probably won’t have a lot of hot sauce on the table anymore. You get it for free when you go and you’ll probably see a price on that now,” said Villasenor.
Everything from margaritas, guacamole, salsa, beer and even candy would all surge in pricing.
“And that’s just the tip of the iceberg. What you don’t see in the grocery store part are all the intermediate goods. All the spark plugs, brake linings,” said Professor Mike Davis with SMU’s Cox School of Business.
Davis said if the U.S. taxes Mexico’s imports, the country will likely tax the goods America sells them. Davis estimates Texas alone sells $100 billion worth of items a year.
“That means we sell less to Mexico and that’s fewer jobs for Americans,” said Davis.
Politics aside, Davis said he has a hard time seeing how the tariff would be good for anyone, especially the U.S.
“This is a tax and it’s a tax on Americans,” said Davis.
According to Davis, President Trump alone could not implement the tariff. It would have to go through Congress and might still be in violation of existing world trade agreements.
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