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The Trump administration's 25% tariffs against Canada and Mexico took effect at 12:01 a.m. Tuesday, and, as U.S. markets plummeted, China, Mexico and Canada unveiled their own plans to strike back.
Many Texas businesses and those who work in manufacturing, logistics and trade anchored in San Antonio began the new business day at the center of economic uncertainty.
"We're very concerned that it's going to harm what has been record employment in the state of Texas. And we're concerned for the consumer," said Glenn Hamer, president and CEO of the Texas Association of Businesses.
"There's reports out there that imposing 25% tariffs could increase vehicles from anywhere between $3,000 to $9,000. We know in terms of produce. We rely on avocados and blueberries and other fresh produce from Mexico and Canada. That's going to increase the price of groceries," he said.
Hamer added that he believes decreasing consumer confidence has something to do with tariffs being imposed on Mexico — the top U.S. trading partner.
"There's a lot of people here, especially in the business community, that generally support President Trump, but they don't support tariffs," said Teclo Garcia, chief executive officer of the Mission Economic Development Corporation.
He said uncertainty is bad for business, which boomed between Texas and Mexico under the recent USMCA trade agreement negotiated under Trump's first term.
"They are not sure of what the impact will be — long term or short term. Will it last one month? Will it last six months? Will it be 25% for 30 days? We just don't know. And that uncertainty is probably what most business owners, not just here in this region but just about anywhere, would tell you," Garcia said. "That sometimes they can live with higher prices or tariffs or something if they just were getting some certainty going forward. That's what I hear the most on the ground."
'The economic chaos'
San Antonio is a key hub in the Texas-Mexico Automotive Supercluster, a network of suppliers and manufacturers stretching from North Texas to central Mexico. It's made up of thousands of component parts that sometimes cross the border several times before a car is manufactured.
"Let's be clear, no amount of horsepower can overcome the economic chaos of a reckless tariff strategy that threatens Texas' economic job engine that has been years in the making," said San Antonio Mayor Ron Nirenberg and Arlington Mayor Jim Ross in a joint letter to Texas' U.S. senators.
The mayors said 3,700 people are employed to build Toyota Tundras and Sequoias in San Antonio, and 5,600 Texans are employed with Toyota suppliers.
They said 5,200 Texans build Yukons, Tahoes, Suburbans, and Escalades in Arlington — with thousands more working for Texas-based GM suppliers.
San Antonio and Arlington are the heart and soul of Texas truck manufacturing.
— Mayor Ron Nirenberg (@Ron_Nirenberg) March 1, 2025
As the President’s tariffs go into effect next week, Arlington’s Mayor Ross and I wrote to our Senators to urge them to help us protect the people of Texas’ truck manufacturing industry.
Thousands… pic.twitter.com/XUfVo1Rnsl
"And we know you [senators] understand that businesses, especially Texas-based suppliers, depend on reliable supply chains, competitive pricing, and consistency in regulation to ensure continued economic growth," the mayors said.
Trump said the tariffs would punish Canada and Mexico for fentanyl trafficking. But he also said the move would encourage car manufacturers and other businesses to move their production to the United States.
"I would just say this to people in Canada or Mexico: If they're going to build car plants, the people that are doing them are much better off building here, because we have the market where they sell the most," Trump told reporters at the White House.
Texas businesses are also bracing for retaliatory tariffs from Mexico.
View from Laredo
The Port of Laredo, the busiest of the country's trade ports, has been on the front line of this tariff fight with Mexico. It averages more than 20,000 truck-crossings per day, carrying goods like automotive and computer parts and produce.
Gerry Schwebel, executive vice president of IBC Bank in Laredo, has been in trade logistics for four decades. He worked on both the NAFTA and the USMCA agreements. He told TPR last month that his main concern about the tariffs is about how long they would remain in effect.
"At first it'll be you try to use it as a tool to achieve an ultimate end or an ultimate goal," he said. "And whether our trade partners will adapt, and they make changes so it becomes a more balanced trade, then that is achieved, and then the president will decide whether he eliminates or reduces that tariff."
He added: "So [President Trump] is an effective negotiator. He's a different type of political leader that the private sector has to adapt to, and we do that. We do that on the border. We adapt to policies of Mexico and the United States, and we're resilient."
Many companies in the automotive and electronics sectors have stocked up on goods as much as they can in anticipation of the tariffs taking effect — filling warehouses in San Antonio to the brim. Companies that distribute fresh produce from Mexico do not have the same luxury to pack warehouses for extended periods of time.
Schwebel said truck and warehouse traffic through Laredo and San Antonio will be an indicator of how long companies — and the general public — can weather the Trump tariffs before the chaos turns into lasting economic harm.
Markets plummet
Wall Street served as an immediate indicator of how the U.S. markets felt about the tariffs. NPR reported that the Dow fell 1.8%, or more than 770 points, in midmorning trading on Tuesday. The Nasdaq and S&P 500 also dropped more than 1.5%.
The price of bitcoin fell below $83,000, shedding all of its gains from a weekend rally after Trump said he would create a U.S. "strategic reserve" of cryptocurrencies, including bitcoin.
Canada and China strike back
NPR reported that China and Canada announced new retaliatory measures on Tuesday, with Mexico soon to follow.
"Beijing responded by slapping additional tariffs of 10%-15% on a variety of U.S. agricultural imports," NPR explained, "including chicken, pork, soy and beef, starting next week, China's finance ministry announced."
NPR added that "Canadian Prime Minister Justin Trudeau, meanwhile, said Ottawa would impose immediate 25% tariffs on more than $20 billion worth of U.S. imports. Tariffs on an additional $86 billion worth of products will take effect in 21 days."
"Mexican President Claudia Sheinbaum denounced the new measures," NPR reported, "saying they lacked reason or justification. Allowing time for dialogue, Sheinbaum said she would wait to announce retaliatory measures until Sunday. She called on all the Mexican people to show up to the country's main square for her speech."
