As cosmopolitan as Santa Barbara County may appear to be, its roots remain in farming.
Agriculture is an integral part of the economic engine that powers the county and the entire region. North County and sections of mid-county in general harbor the farm and vineyard products that provide billions of dollars in local revenues.
One wonders what will happen to that thriving agricultural industry if President Trump makes good on his promise to build a wall the length of the border between the United States and Mexico.
There are already sections of wall along portions of the U.S./Mexico border, but until recently the flow of immigrants coming north illegally to a nation whose image of streets paved with gold has created monumental problems for governments at all levels in this country.
Those are issues of ideology and politics. Our focus today is on the economic ramifications of a full-on, border-length wall, and not just the tens of billions of dollars required to build such a massive structure.
Trump has insisted for months that Mexico would pay the costs of building the border barrier, a claim that elicited scorn and bad jokes from Mexico’s highest government officials. Perhaps the president is now convinced Mexico will not finance the wall’s construction, so the administration apparently has settled on a different strategy — placing a high tariff on goods imported from Mexico, including fresh produce.
That is a double-edged sword for U.S. growers and consumers. For growers here on the Central Coast, it could vastly increase the value of their crops, if proposed tariffs compel Mexico’s farmers to stop growing fresh produce for U.S. markets. On the other hand, if Mexico stops sending fresh fruits and vegetables, U.S. consumers can expect some very hefty price increases at the supermarket.
As it is now, Mexico is by far the leading supplier of fresh vegetables to the United States. More than 70 percent of our tomatoes come from Mexico, about 3.9 billion pounds a year. Of the nearly 12 billion pounds of fresh vegetables sold in the U.S., almost 73 percent comes from Mexican farms.
Obviously, the U.S. market is keeping many of Mexico’s vegetable growing operations in business. A border tariff would be devastating to Mexico’s economy — and just as devastating to prices in our local grocery stores.
This discussion does not include the impacts of such a wall on the Central Coast field worker labor market, which we’ve written about so many times in recent years.
The ramifications of Trump carrying through on a campaign promise are many, far-ranging and potentially disastrous, which is why so many Republicans in Congress are avoiding the issue of how to pay for Trump’s wall.
There was talk of a border-adjustment tax last July, but after very strong opposition from U.S. retailers, the GOP congressional leadership retreated from the notion. That plan would place a tariff on all foreign goods, which means U.S. consumers would have been paying higher prices for almost everything made abroad.
The GOP’s reluctance to embrace that scheme likely means those congressional leaders would have the same reaction to a tax on just Mexico’s products.
Building a wall might have a certain visceral appeal, but one that fades, rapidly, when you consider all the costs.
What America needs is not a punitive tax on our neighbors, but rather a leader who can forge mutually beneficial agreements with trading partners. That would be the art of the deal.