Mexican cartels drain American consumers

Yahoo

21-03-2025

WASHINGTON (NEXSTAR) – Congressman Vincente Gonzalez (D-Texas.) said if you're buying avocados, cars or anything made in Mexico, you are likely paying more, because cartels extort companies that do business in Mexico.
'There's checkpoints that are set up throughout Mexico that are controlled by Mexican criminal organizations that are taxing commerce,' said Rep. Vincente Gonzalez (D-Texas.). 'That is not free trade, in my opinion.'
Gonzalez said extortion by cartels amounts to a tariff on American consumers.
'We've allowed this to fester and grow,' said Gonzalez. 'I think President Trump has come in, in a very aggressive way, hyper-focused on this issue. I think he should have bipartisan support on this.'
Pedro Casas, the CEO of the American Chamber of Commerce in Mexico City, said he disagrees on a portion of Gonzalez's claim.
'The cross-border trade is not controlled whatsoever by organized crime,' Casas said.
Casas said his organization surveys companies that do business in Mexico. He said, of the companies surveyed, about half said they paid 2-10% of their budget on security, which could raise prices.
'It is a widespread problem that we need to solve because that's affecting the Mexican economy,' Casas said.
President Donald Trump has threatened tariffs against Mexico to try to get them to stop the cartels and stop fentanyl from crossing the border.
'We're seeing a slowdown in the appetite for investment on both sides of the border,' Casas said. 'Auto parts, or a vehicle itself, it crosses the border throughout its production around 8-10 times before being a finished good that's exported, lets say from Mexico to the United States.'
'You're going to see, it's not only a one-time 25% tariffs, but it's actually going to be an 8-times 25% tariff going on,' he added.
Casas said, because of trade agreements, like NAFTA and the U.S., Mexico, Canada Trade Agreement signed under the first Trump administration, companies have built trade between the U.S. and Mexico into their manufacturing.
President Trump has credited the new Mexican President Claudia Sheinbaum for making progress on border security and drug smuggling. Sheinbaum said Mexico sent 29 cartel figures to the United States, weakened some cartels and dismantled more than 100 synthetic drug labs.
Casas said her actions have helped improve safety in Mexico.
'We are seeing a more aggressive approach toward security, a more active policy,' Casas said. 'As you might remember, in the past administration of Andres Manuel Lopez Obrador, his security policy could be summarized in the slogan 'hugs not bullets,' which was basically a very passive approach on security. And we are seeing something completely different.'
The White House said another goal of President Trump's tariffs is to bring manufacturing back to the United States.
'One of the things that President Trump's tariff policy is seeking to accomplish is to get people to buy U.S. cars, instead of foreign cars, so that we create jobs here,' said Kevin Hassett, the Director of the National Economic Council.
President Trump said 25% tariffs on goods from Mexico will go into effect in April.
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