How could a tariff on Mexico imports affect the Port of New Orleans?

NEW ORLEANS, LA (WVUE) - President Donald Trump insists Mexico will pay for his planned southern border wall, and his administration continues to consider imposing a 20 percent tax on Mexican imports.

"Anytime a tariff is put on any good for trade anywhere it has an impact because it raises prices. So it always affects demand," said Bob Landry, vice president  and chief commercial officer at the Port of New Orleans.

He thinks consumers would feel the effects of such a tax.

"Somebody's going to have to pay for the 20 percent, and usually it's going to end up being the consumer. Somewhere you're going to pay for it, he said. ...A bigger concern from a port perspective is that when tariffs are placed on certain commodities, the other country then says, 'Well we're going to to put tariffs on your commodities.' And so this snowball effect starts to happen, and next thing you know, you're in a full-out trade war."

The president has repeatedly said he wants more good made in America.

"I want you to move your companies back to the United States. And I want to manufacture in the United States," the president said Tuesday.

According to the U.S. Commerce Department, in 2015, imports from Mexico via Louisiana totaled more than $1.4 billion. And on some specific items, the dollar amount for iron and steel was $66.5 million. For coffee, tea and spices imported from Mexico, it was over $36 million in U.S. dollars.

"Mexico is not our biggest trade partner by any stretch, but they're an important trading partner. We get coffee and bananas, we also get some chemical products, and then, of course, we ship out paper products and some steel products, as well," Landry said.

President Trump is no fan of NAFTA and spoke about his sentiments again Thursday.

"I have very serious concerns about NAFTA," Trump said. "NAFTA has been a catastrophe for our country, for our workers, and our jobs and our companies...they're leaving our country. I want to change it, and maybe we do it, maybe we do a new NAFTA."

Landry also responded to a question about what would be the impact on the port if NAFTA was scrapped.

"The consequences wouldn't be dramatic because they are such a small percentage of our overall trade, but I think it could affect other countries with whom we trade that are dependent upon Mexico, as well," said Landry.

There are a lot of question marks about what the new president will do on the tax on imports and on NAFTA, but for the Port of New Orleans, uncertainty is never ideal.

"The biggest factor that we have to take into account is there's so much uncertainty. You look at investment patterns anywhere in the trade community, uncertainty is the biggest detriment to seeing trade go forward," Landry stated.

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