Latest news with #JavierPalomarez
Yahoo
06-05-2025
- Business
- Yahoo
Trump's Tariff Plans Spark Uncertainty for the Denim Industry
'Many consumers might not know this, but the U.S. heavily relies on Mexico for our denim. In fact, in 2023, Mexico was the leading importer of denim fabric (made from at least 85 percent cotton) to the U.S., with imports valued at nearly $56 million, according to Statista,' said Javier Palomarez, founder and CEO of the United States Hispanic Business Council (USHBC). 'If Trump's tariffs on Mexico are broad and ultimately apply to many goods—including materials or products related to denim—the ultimate cost of importing denim from Mexico will greatly increase.' While specifics are currently scarce, twice-deferred 25-percent duties on goods from Mexico and Canada not covered by the United States-Mexico-Canada Agreement (USMCA) took effect on April 2, which Trump refers to as America's 'Liberation Day.' Fast-forward to 2025, and the president has continued his aggressive trade policies—this time with an even sharper focus on addressing trade imbalances and 'protecting domestic industries.' While China was a primary target of Trump's trade policies, his efforts to reshape global commerce extended beyond Asia. He also imposed the United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA)—signed in 1992 by Canada, Mexico and the U.S.—to create a 'more balanced and reciprocal trade environment, support high-paying jobs for Americans and foster economic growth in North America,' according to U.S. Customs and Border Protection. During his first term, Trump imposed tariffs on $380 billion worth of Chinese goods. In response to these aggressive trade measures, the U.S. and China negotiated a Phase One trade agreement in early 2020, aiming to rebalance their trade relationship and safeguard American intellectual property and technology. Since taking office as the 47th president just over two months ago, Trump has signed multiple executive orders that have caused panic across the globe, including efforts to dismantle the Department of Education and reduce the federal bureaucracy. However, one order that has put the denim industry—along with many others like pharmaceuticals and automotive—on edge is the president's plan to impose new tariffs on key trading partners, including Mexico. Story Continues Despite the challenges ahead, denim mills and brands remain cautiously optimistic. While Artistic Milliners (AM) is based in Pakistan, where most of its production takes place, it recently expanded its global footprint by acquiring VF Corporation's Dickies de Parras S. de RL de CV facility in Parras, Mexico. When the acquisition was announced, AM moved quickly to upgrade the 10-acre complex, which consists of two buildings. The company also reaffirmed its commitment to expanding in Mexico, stating that it remains on track to scale its operations in the region. Its decision to push forward with these plans showcases AM's confidence in the long-term viability of its expansion strategy, regardless of looming tariffs. 'We are continuing business as normal. We strongly believe in the add value benefit of being in [Mexico] and investing in it,' Sergio Turbay, executive vice president of global strategy and sales at AM, told SJ Denim. 'The great thing is that our brands and partners believe in this as well. So, we are continuing our investment, and we look forward to expanding our manufacturing in the region [even further].' Los Angeles-based women's denim brand Ética is also unconcerned about Trump's tariffs and is 'proceeding with business as usual.' 'As of right now, we're not too worried about it—but we'll see what happens [further down the line],' a sales representative at Ética Denim, which operates a factory in Puebla, Mexico, told SJ Denim. 'I've been asking our CEO [Agustin Ramirez] about it, and he doesn't seem too concerned. So, for now, we're taking a wait-and-see approach.' The representative added that Ética's size gives it more flexibility compared to larger brands. 'We're still a relatively small brand and company, so we're able to be a little nimbler than some of our bigger partners. That gives us some breathing room to adapt if needed.' Dr. Sheng Lu, professor of apparel studies at the University of Delaware, is not as optimistic, though. Lu noted that if denim products made in Mexico do face new tariffs when exported to the U.S., their price competitiveness could be significantly impacted, potentially leading to a loss of market share. Lu's research for the '2024 Fashion Industry Benchmarking Study,' conducted in collaboration with the United States Fashion Industry Association, shows that a significant portion of U.S. denim imports from Mexico serve the mass and value market segments, where consumers are highly sensitive to price changes. 'While Mexico is a key supplier of denim products to the U.S. market, similar products are also widely available from Asian countries like Bangladesh and China,' he said. 'Additionally, many 'Made in Mexico' denim garments incorporate U.S. cotton, yarns and fabrics through a regional supply chain. As a result, a decline in U.S. denim apparel imports from Mexico could also have a negative impact on the U.S. textile industry.' Beyond the tariff increases themselves, Lu noted that a major concern for U.S. denim brands is the ongoing uncertainty surrounding trade policy. With no sourcing destination considered 'safe' or immune to Trump's tariffs, U.S. brands and retailers are hesitant to commit to expanding production in any country, he added. 'A significant increase in sourcing 'Made in the USA' products is unlikely due to limited production capacity,' he said. 'Even sourcing diversification—once a widely adopted strategy to mitigate risk—may be less effective this time, as any country could be targeted.' Looming labor challenges Another significant challenge facing mills and brands is the increasing labor shortage in Mexico. For years, Mexico's appeal as a manufacturing hub has been driven by its low labor costs and young workforce. In fact, fully loaded manufacturing labor costs range from $6 to $8 an hour, including bonuses and benefits, while roughly one-third of the country's population—around 42 million people—is 19 or younger, according to Boston Consulting Group (BCG). However, Mexico's labor market has begun to show signs of strain. According to AM, rising labor costs in the region are largely due to the USMCA agreement aimed at 'leveling the playing field.' 'Fabric pricing in the region reflects what our clients expect compared to other regions and their macroeconomic situations,' Turbay said. 'Just like our clients, we must remain calm and take a long-term view. We believe that trade policies for clothing will eventually be exempt, and we're in a strong position to compete due to our global presence. This is a key differentiator that we're very excited about.' Erik Kingsley, partner at Kingsley Szamet law firm—where he focuses on employment law and workers' rights—echoed AM's sentiment, adding that Trump's proposed 25-percent tariffs on Mexican goods could have 'significant implications' for labor markets on both sides of the border. 'If these tariffs take effect, the immediate impact will likely be a downturn in Mexico's textile and apparel manufacturing sector. U.S.-based brands that currently rely on Mexican production may scale back orders, seek alternative suppliers or even relocate operations to avoid higher costs,' Kingsley said. 'This could result in job losses and wage stagnation for Mexican workers in these industries. In some cases, factories may shut down altogether if the cost increase makes them uncompetitive in the global market.' Over the long term, Kingsley added, continued aggressive trade policies could push companies to diversify their supply chains, reducing reliance on Mexico in favor of other manufacturing hubs in Central America or Asia. 'Mexico may respond by incentivizing domestic production or strengthening trade relationships with non-U.S. partners,' Kingsley said. 'Additionally, we could see increased automation in manufacturing as companies seek to offset higher costs by reducing labor dependence.' Beyond the impact on Mexico, these tariffs could also disrupt U.S. employment. 'If the cost of importing textiles rises significantly, American retailers and brands may face financial strain, leading to job cuts or price hikes that affect consumers. Additionally, since Mexico remains a key trading partner under the USMCA, these tariffs could strain diplomatic and economic relations,' Kingsley said. 'Businesses operating in both countries should prepare for potential volatility and legal challenges as these trade measures unfold.' Although the future remains uncertain, Patricia Medina, principal of Mexico-based denim manufacturer Aztex Trading and co-director of Mexmakers, a collaborative network of Mexican textile and apparel manufacturers focused on sustainable and traceable full-package production, believes Mexico will continue to be a vital manufacturing hub—especially for brands that recognize the shifting global landscape. 'The world in which NAFTA was created no longer exists, but Mexico still has a crucial role to play,' Medina said. 'We can and will serve the new markets—those that prioritize more than just the initial cost of production.' This article is published in SJ Denim's spring issue. Click here to read the full issue.
Yahoo
30-03-2025
- Business
- Yahoo
Will the US Implement a Caregiver Tax Credit? Experts Explain
Millions of Americans provide unpaid care for aging or ill family members, and it's costing them. 'Family caregivers spend, on average, over a quarter of their income on providing said care,' said Javier Palomarez, founder and CEO of the United States Hispanic Business Council. 'Considering the sustained rise of healthcare costs, this is only sure to increase.' Learn More: Read Next: To help ease the financial burden, lawmakers have proposed the Credit for Caring Act, a bill that would provide tax relief to eligible family caregivers. Experts say the credit could offer meaningful support — but its future is far from certain. The proposal would give caregivers a financial break on out-of-pocket expenses. 'The Credit for Caring Act proposes a tax credit of up to $5,000 per year based on 30% of 'qualified expenses' to the extent such expenses exceed $2,000,' explained Annette Nellen, a certified public accountant (CPA), attorney, and tax professor at San Jose State University. 'So if someone has expenses of $2,000 or less, no credit.' To qualify, 'the expenses must be paid by an 'eligible caregiver' who pays 'qualified expenses' for a 'qualified care recipient.' The taxpayer claiming the credit must have earned income above $7,500.' Nellen also notes that the credit is intended for middle to low-income individuals who pay these expenses. 'The credit starts to phase out when modified AGI exceeds $75,000 ($150,000 for a married couple),' she explained. Armine Alajian, CPA and founder of the Alajian Group, added context to what counts as a qualified expense: 'Those expenses might include adult day care, home improvements like safety handrails or paying for in-home healthcare aides.' Check Out: 'A tax credit would provide immediate relief to an estimated 53 million Americans that currently serve as unpaid family caregivers and provide an economic lifeline for those that have spent their time and money taking care of others,' said Palomarez. Shane Lucado, founder and CEO of InPerSuit, emphasizes the potential for financial relief: 'Many caregivers spend $7,000 or more each year on services such as home health aides and medical supplies, so a tax credit could ease some of that financial pressure.' Lucado also sees wider economic benefits. 'This credit would lower financial burdens for caregivers and lead to higher workforce participation rates from those who need to quit employment to provide care for family members,' he added. 'Workplace productivity losses could decrease when employees balance their work responsibilities with caregiving tasks.' Palomarez agrees the credit could improve care quality, too. 'The tax credit will also enable family caregivers to invest in higher quality equipment, medicine and surgeries,' he noted. Support for the bill is strong, but progress has been slow. 'This bill, which is something AARP has been trying to make a reality for more than 10 years, is one of the few issues that has bipartisan support among lawmakers and the public,' said Alajian. 'But despite that, a similar version of the bill didn't make it out of committee last year, so nothing is guaranteed.' Even if the bill becomes law, experts point out its limitations. 'While a tax credit of up to $5,000 would be a helpful sum,' said Alajian. 'Sadly, many people are forced to limit or even quit their jobs when caregiving becomes a full-time job in itself. So, it would be far from the amount needed to compensate for leaving a career.' Nellen raises another concern: The difficulty of navigating tax-based aid. 'The complexity of definitions, recordkeeping and calculations begs the question of whether providing this financial assistance through the tax law is the best approach,' Nellen said. 'Alternatives include providing assistance directly to the 'qualified care recipient' and offering more resources for care (care facilities, visiting nurses, etc.).' The bill's future is still unclear. 'Turning this tax credit into law presents difficulties since lawmakers must weigh the cost of its rollout against expected revenue declines,' said Lucado. 'The federal government has to find a way to pay for this credit while avoiding major effects on current social programs or deficit growth.' In other words, Congress would need to find money to fund the credit without cutting other programs or increasing the national debt. Still, with a growing population of unpaid caregivers and rising medical costs, experts agree the need is real — even if the solution is complicated. More From GOBankingRates 5 Types of Vehicles Retirees Should Stay Away From Buying 12 SUVs With the Most Reliable Engines 4 Things You Should Do if You Want To Retire Early 6 Big Shakeups Coming to Social Security in 2025 This article originally appeared on Will the US Implement a Caregiver Tax Credit? Experts Explain
Yahoo
06-03-2025
- Business
- Yahoo
Worried About Tariffs on Canadian Energy? How It Might Impact You
Cars and agricultural products aren't the only goods the Trump administration is targeting with tariffs. As part of the package of tariffs announced on March 5, the US slapped a 10% tariff on Canadian energy in addition to 25% tariffs on nearly all goods imported from Canada and Mexico. Although some of these, such as the 25% on car makers, are temporarily exempted, the situation continues to change by the day, if not the hour. Currently, tariffs on nearly all Mexican products are suspended again until April 2. On paper, the US imports only about 1% of its power needs but the Northeast grid is significantly intertwined with the Canadian energy market. "Some American states might see energy costs rise rapidly, while others might experience a delayed effect over several weeks," said Javier Palomarez, founder and CEO of the United States Hispanic Business Council. Ontario Premier Doug Ford is preparing to tax electricity transmission to the US, which could also increase costs in the Northeast, where the price of power is already higher than the national average. The US is an importer of Canadian power, buying 2,700 gigawatts of power in 2024. New York received the most power in 2024, at 8.76 million megawatts. This has the significant potential to drive up energy prices and other costs for American consumers in some regions but some impacts may not be immediately apparent. To determine what may happen, we spoke with experts to assess the effect US tariffs may have on you. "Since American companies pay the extra cost of importing goods, consumers may face higher prices for a plethora of goods and services, such as transportation, gas, electronics, lumber, metals, vehicles, produce, appliances and agriculture, just to name a few," Palomarez said. Northeastern states and states heavily reliant on transportation and goods from taxed countries might feel more significant effects. The duration of the higher costs will depend on how companies absorb the costs and refocus their strategies to domestic production and consumers. The impacts are likely to be spread out across a few key sectors. The good news is that the impact of tariffs on consumers might not be immediate, according to two experts we spoke with. "Markets (producers and consumers) have already adjusted for higher prices," said Jonathan Colehower, a supply chain expert at UST, a digital technology company that focuses on 5G, AI and retail consulting services. "The reality won't hit for another six months, just in time for holiday planning." That means consumers can expect increased prices to hit toward the end of the year, assuming tariffs remain in effect. With energy prices in particular, the increased costs in the wholesale market might not show up on the rates individual consumers pay for a while. The chaos and back-and-forth on tariffs aren't likely to help keep prices low. Currently, some tariffs, such as the one on auto manufacturers, are again delayed. Reciprocal tariffs are still expected to go into effect on April 2. Manufacturers have likely already priced this in. One region where we might see an immediate impact on prices is the Midwest and New England. According to Will Hares, senior analyst, European Oil & Gas at Bloomberg Intelligence, the Midwest is reliant on Canadian crude and New England is exposed to Canada's Irving oil refinery exports. Power is likely to be less affected, aside from Ontario's threat to cut off electricity exports to 1.5 million homes in New England. Tariffs could have mixed effects on oil in particular. According to Rob Thummel, senior portfolio manager at Tortoise Capital, Canada exports approximately 4 million barrels of oil per day to the US. It's also been the largest source of crude oil imports into the US since 2000 and Canadian crude oil is cheaper than US crude by as much as $20 per barrel. "Canada and Mexico imports account for 25% of the oil we refine into gasoline and Canada alone accounts for nearly 20% of our natural gas supply," said Palomerez. "While long-term impacts are expected to settle at around a 2%-5% price increase, the issue could compound with existing market stressors. For example, the price of natural gas has already increased 111% in the past year. After the announcement of the tariffs, it's increasing at a rate of 14% a week." However, this impact is likely to be disproportionate in certain regions. The Midwest is expected to be negatively affected. "Canada provides 4 million barrels per day of crude oil to the US, representing 60% of USA's oil imports," said Hares. "The US Midwest gets 100% of its oil from Canada and would likely be among the most exposed regions to price changes." Other experts we spoke with didn't think the impact on oil itself would be as significant as the effects of the rest of the economy. "Tariffs could have a modest effect on oil prices from imports and exports themselves, but if tariffs stay in place, the inflation could cause a recession that would eventually reduce oil prices," said Jason DeLorenzo, principal and owner of Ad Deum Funds and the Volland trading platform. The tariffs may significantly impact renewable energy. This means that going solar could become more expensive but it can also affect other industries. "The Trump tariffs could significantly harm the electric vehicle, solar, battery and wind industries," said Palomarez. "Look at it this way: China supplies 75% of the world's lithium-ion batteries; Mexico supplies 40% of our imported steel; and Canada supplies half of the refined nickel America uses. These are all critical components of solar panels, wind turbines and batteries." That also means that, combined with auto tariffs, electric vehicle adoption could get a lot more expensive. However, Hares disagreed that the China tariffs will significantly impact renewable energy prices. "China is not a significant renewable equipment supplier for the US owing largely to pre-existing tariffs," said Hares. "China controls over 85% of the global solar supply chain and the US's pre-existing 50% China solar tariffs (now 70%) had already nearly eliminated US demand for China solar." Essentially, US consumers are already paying higher prices for solar because of pre-existing tariffs. Less than 1% of direct solar imports came from China, with US companies opting to import from Southeast Asia, leading to higher-priced panels in the US compared with China. "Rapid implementation of extreme tariffs will in its very nature disrupt our economy, hitting small businesses and families the hardest," said Palmorez. This has long been the consensus of economists, with some crediting the Smoot-Hawley Tariff Act with reducing global trade and worsening the Great Depression. "Tariffs are not great for the overall economy," said DeLorenzo. "At this time, businesses have to measure what is more important to them, profits or market share. If profits, they will pass these costs onto consumers. If market share, they will assume a lot of these costs." What could make matters worse is if the US enters into a spiraling tariff war with its closest trading partners. "We have already seen initial stages of retaliatory tariffs from Canada on $30 billion of US products, with significant further escalation of $125 billion promised if US tariffs remain in place in the next 21 days," said Hares. China has also responded, while Mexico is holding off for now. According to Brookings, the US, Mexico and Canada can all anticipate a major hit to their economies if tariffs remain in place. Expect increases in inflation, reduction in economic growth, job loss, falling wages and a contraction in exports among all parties.
Associated Press
27-01-2025
- Business
- Associated Press
USHBC Commends Trump FDA for Pulling Menthol Ban
WASHINGTON DC, DC, UNITED STATES, January 27, 2025 / / -- The United States Hispanic Business Council (USHBC) applauds President Donald Trump's decisive action to withdraw former President Joe Biden's proposed menthol cigarette ban. This critical decision underscores a commitment to protecting small businesses, preventing economic harm, reinforcing national security, and upholding the American principles of individual choice and accountability. The proposed menthol ban threatened the livelihoods of thousands of small business owners, leading to severe, unintended consequences. Convenience stores and other independent businesses, which rely on cigarette sales for up to 30% of their revenue, faced a direct threat to their economic stability. Further, state and federal governments collect over $31.5 billion annually from tobacco taxes, funding essential services such as education and infrastructure. Additionally, of the African Americans who do smoke, 84% smoke menthol cigarettes, and of the Hispanics who smoke, 51% smoke menthol cigarettes. A ban would criminalize otherwise law-abiding and tax-paying members of these communities. Finally, the vacuum created by prohibition would fuel illegal trade by the Mexican cartels and undermine public safety. Javier Palomarez, USHBC President & CEO, issued the following statement: 'Prohibition has never worked. By withdrawing this misguided proposal, President Trump has demonstrated a deep understanding of the challenges faced by small businesses. This decision prioritizes the prosperity of hardworking entrepreneurs and workers and preserves the significant contributions they make to our economy.' Javier continued by saying: 'I also commend former Senator Kyrsten Sinema (I-AZ), Senator Tom Cotton (R-AR), House Small Business Committee Chair Roger Williams (R-TX), Congressman Jared Moskowitz (D-FL), Andrew Garbarino (R-NY), and Dan Meuser (R-PA), among others, for their leadership. I praise their efforts for opposing a policy that would have violated state regulatory powers, violated individual freedom, and aided foreign terrorist and criminal organizations in the illicit cigarette trade.' As the leading advocate for the Hispanic business community, the USHBC remains steadfast in its commitment to collaborating with the Trump administration, as well as congressional Republicans and Democrats. Together, we aim to champion policies that support small businesses, strengthen local economies, and empower Hispanic entrepreneurs and their workers. To learn more, follow @myushbc and @JPalomarez on X. Visit to become a member today. About the USHBC Javier Palomarez is the President & CEO of the United States Hispanic Business Council (USHBC). The United States Hispanic Business Council (USHBC) is the leading voice for the Hispanic business community. A 501(c)6 non-profit organization, the USHBC focuses on improving access to contracting in the public and private sector, fair representation of Hispanics in business, media, and politics and ensuring Hispanics have a voice in the national dialogue. The USHBC is a nonpartisan organization. Katherine O'Hara The O'Hara Project X LinkedIn Legal Disclaimer:
