San Antonio businesses prepare for new tariffs on Mexican imports

Trump: 25% tariffs will force Mexican action on immigration

By Garrett Brnger - Reporter, Adam B. Higgins - Photojournalist

SAN ANTONIO - As a wholesale supplier of mops, brooms and related products, PelRay International Co. in San Antonio pushes out a lot of goods each year, many of which come from over the border.

"I would say probably a good 80% of what we sell comes from Mexico," said Operations Manager David McGee.

In less than two weeks, PelRay's products could all be more expensive to obtain.

Earlier this week, the Trump administration announced plans to impose a 5% tariff on all imported Mexican goods beginning June 10.

The tariff rate would increase in steps over the next few months up to 25% on Oct. 1, "unless and until," President Donald Trump said, "Mexico substantially stops the illegal inflow of aliens coming through its territory."

It is not clear exactly what benchmarks or actions the president is looking for. In a statement issued Thursday, Trump said success would be determined "in our sole discretion and judgment."

In the meantime, businesses relying on those imported goods will face increased costs.

McGee said that, as a dealer, PelRay already works with thin margins. So any new tariff, even one at 5%, would require the company to raise its prices.

"If it went to 25%, we'd have to raise the prices a lot, and that could slow down sales," McGee said. "I mean, our customers would probably buy less and we would buy less and import less."

It isn't just brooms coming over the border, either. Toyota, for example, confirmed to KSAT that its Tundras and Tacomas made at the San Antonio plant use parts imported from Mexico.

Richard Perez, the president and CEO of the San Antonio Chamber of Commerce, listed a variety of goods that would be affected including specialized manufacturing parts, medical equipment and produce.

"The list goes on and on and on, and it concerns me greatly," Perez said. "That's just going to make my costs go up. It's going to make every citizen's costs go up, and it makes it that much harder to make ends meet."

News of the tariffs caught PelRay and its customers by surprise and they have to figure out how to deal with it, McGee said.

"How we'll deal with it, time will tell. We'll just have to roll with the punches and do what we can."

Toyota released the following statement to KSAT:

The auto sector – and the 10 million American jobs it supports – relies upon the North American supply chain and cross border commerce to remain globally competitive. This is especially true with auto parts which can cross the U.S. border multiple times before final assembly.

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