Monday was expected to be a chaotic day at Texas' trade ports with Mexico as companies scrambled to move goods into the U.S. before President Donald Trump's tariffs took effect this week.
The financial market's first hours confirmed fears of new trade war between the U.S., Mexico and Canada, along with a possible second tariff fight with the European Union. Reuters reported Asian stock markets saw significant drops. Worries were similarly reflected in European trading. Reuters then noted that the S&P 500 fell 1.7% in New York.
But a glimmer of hope broke through the geopolitical gloom by mid morning. Trump announced on social media that he would pause his executive orders on the tariffs for one month after Mexico agreed to deploy 10,000 troops to reinforce its border so as to cut the flow of fentanyl and other drugs into the U.S.
Mexican President Claudia Sheinbaum added that the deal also commits the Trump administration to fight the flow of weapons flowing south into Mexico.
Sostuvimos una buena conversación con el presidente Trump con mucho respeto a nuestra relación y la soberanía; llegamos a una serie de acuerdos:
— Claudia Sheinbaum Pardo (@Claudiashein) February 3, 2025
1.México reforzará la frontera norte con 10 mil elementos de la Guardia Nacional de forma inmediata, para evitar el tráfico de drogas…
Trump said Mexico and the U.S. will spend the next four weeks furthering their negotiations. The 25% tariffs on Canada and the 10% tariffs on China were still in place and set to take effect on Tuesday.
The port of Laredo, the busiest of the country's trade ports, has been on the front line of this tariff fight. It averages more than 20,000 trucks crossings per day, carrying goods like automotive and computer parts and produce.
If the tariffs move forward a month from now, 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.
Gerry Schwebel, executive vice president of IBC Bank, has a front row seat to the complex transborder economic ebb and flow.
"My office overlooks I-35 and the Kansas City Rail Line, which is now Canadian Pacific Kansas City Rail, runs through the back of my building," he said. "So I see trains every day. I see trucks and cars every day. We live it every day."
Schwebel said it would likely take time before tariffs have a major impact on the Texas economy, and he's hopeful the tariffs would not be imposed for a long period of time.
"Now it may, it may not happen the first day. It may not happen the first week," he explained. "But if this goes beyond perhaps a 90-day period, then we'll begin really to see and monitor those trends."
Schwebel has been in trade logistics for four decades. He worked on both the NAFTA and the USMCA agreements. He says 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 he [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."
Schwebel said the first sign of tariff impact would be a slowdown in the more than 20,000 trucks a day that pass through Laredo.
"The port of Laredo has been driven by auto and electronic sectors and agriculture sectors. So when we look at any economic impact measured by the supply chain network is when we're going to be able to feel it right away. We'll be able to see it if we see a reduction in the truck activity."
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