Proposed border tax draws concern from many corners of Kansas City

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KANSAS CITY, Mo. -- An economist says a 20 percent tax on imports from Mexico could have a damaging impact on the city's economy.

"We get virtually all of our avocados from Mexico," said Chris Kuehl, managing director of Armada Corporate Intelligence. "So say goodbye to guacamole."

President Donald Trump spoke for about an hour by phone Friday with Mexico's president, during some of the most strained relations between the two neighboring nations.

The two leaders agreed to resolve their differences, after the Trump administration talked about a tax on Mexican imports as one option to pay for a wall along the border. The president tweeted Friday that Mexico has taken advantage of the United States long enough, massive trade deficits and a very weak border must change.

On Kansas City's west side some are concerned how a border tax could affect business here. Los Alamos Market used to bring truckloads of arts and crafts from Mexico to sell at the store, where eager Americans would snap them up. But now, the owner says that may not happen anymore.

"From metal mariachis, La Katrina, the statue, pinatas, you name it we had it," said Gus Juarez, the store owner.

For years, Juarez made a living buying products from Mexico to sell in his west side market. Inside, you can find everything from Mexican made Coca-Cola to authentic clay chimineas.

"It's a big market because like I always tell my customers, I save them from going down there and getting it themselves," Juarez said. "I just bring it here. There's a big market for that."

But Juarez says he's not going to make another trip in his truck anytime soon. As a citizen of both Mexico and the United States, he wants to wait and see how trade between the two nations changes. He says a tax on imports may make pinatas and mariachis harder to sell.

"I have a lot of business with Mexico and now these days there's not much chance I'll be able to do it like I used to," Juarez said.

The auto industry also has a huge investment in Mexico. Economists say about 1.7-million American jobs depend on Mexican trade, and Kansas City is a hub in moving those goods back and forth across the border.

"Kansas City Southern at one point was thinking of changing its name to NAFTA Rail," Kuehl said. "That's how much business it does in Mexico and elsewhere. It would affect car manufacturers here, Affect food prices here, It would affect an awful lot of the local economy."

Kuehl also says while American consumers should expect higher prices, farmers and others who sell to Mexico could see their markets shrink because Mexican consumers are less likely to pay higher prices if a retaliatory tariff is imposed.

During the last 20 years of the North American Free Trade Agreement, trade between the two nations increasingly has become one marketplace.
As an example, most of the cement sold in the United States comes from Mexico. And Mexicans buy more than half of the cheese exported from Wisconsin.