While Arizona Republicans praise President Donald Trump’s tariff threat against Mexico as a deft negotiating ploy, Democrats warn it is creating an increasingly unstable relationship with the state’s largest trading partner.
Trump signed executive orders over the weekend levying 25% tariffs on goods from Mexico and Canada as a way to pressure the countries to do more to combat fentanyl trafficking.
He reversed course on the tariffs Monday after Mexican President Claudia Sheinbaum announced her government will send 10,000 National Guard troops to the border. Sheinbaum said the U.S. has also agreed to work toward stopping weapons trafficking into Mexico.
'I think this is a good thing for the country and the economy'
“This is an example of the president's leadership,” said Rep. Tony Rivero (R-Peoria), who chairs the Arizona House’s Committee on International Trade.
In December, Rivero had expressed concern over the president’s threat to start a trade war with Mexico, saying, “I believe tariffs are not in our interest or Mexico's or Canada's interests.”
At the time, Rivero said he hoped the president was using the tariff threat as a negotiating tactic to advance American interests. Rivero now says that’s exactly what Trump did.
“He's a business person and he understands what works and what doesn't, and he's brought … Mexico to the table, so I think this is a good thing for the country and the economy.”
But the tariff threat isn’t gone – Trump only agreed to delay tariffs on Mexico by 30 days.
'My level of concern is red alert'
Rep. Nancy Gutierrez, the assistant Democratic leader in the Arizona House, said she fears that looming threat will drive up prices and hurt Arizona businesses that rely on the Arizona-Mexico trade relationship.
“It's clear that Arizonans are struggling, and so I think my caucus is focused on lowering costs and it doesn't seem that the Republicans are,” Gutierrez said.
Mexico is Arizona’s single largest trading partner, with a trade relationship valued at $20 billion annually. Much of that trade focuses on agriculture and food that ends up on American shelves, but numerous other industries could also be disrupted by tariffs on Mexico.
“We have numerous companies here in everything from aerospace, even some defense companies and automotive, that produce products in the U.S,” Greater Phoenix Economic Council President Chris Camacho said in December. “They integrate some of those components in Mexico. The Mexican manufacturers then ship that product back to the United States.”
Gutierrez said destabilizing that relationship will hurt Arizona’s economy, threatening the state’s ability to pay for key services as the state simultaneously faces the prospect of billions of dollars in federal funding cuts.
“My level of concern is red alert,” she said.
“Tariffs are going to raise the costs for everything that we have here, and I find it interesting that a president who is the one that made these negotiations that we're living by with Canada and Mexico now doesn't think he did a good enough job negotiating those, and so now we have to have tariffs,” Gutierrez added, referencing the United States-Mexico-Canada Agreement negotiated by Trump’s first administration.
Rivero acknowledged that keeping the possibility of tariffs on the table could still impact the state’s economy, but he said he is encouraged by how quickly Mexico responded to Trump's demands.
“I think there's always that risk of prices increasing, but I think the President is going to do what's in the best interest of the country and I can't see tariffs being implemented long term,” he said.
The U.S. and Canada have also reached an agreement to delay tariffs against that country, another top trade partner for Arizona.
Arizona sent $2.7 billion in goods to Canada in 2023, making it the state’s largest export market. The state imported about $2.5 billion in goods from Canada that year, according to the Arizona Commerce Authority.
Camacho said Canada is Arizona’s number one foreign direct investment partner, meaning companies in Canada invest more in Arizona than companies from any other foreign nation.
“It's companies making investments here, and so this alignment, you know, being geographic neighbors, arguably is critically important for the health of our economy,” Camacho said.
In response to Trump’s tariffs, Canadian Prime Minister Justin Trudeau announced 25% retaliatory tariffs on an array of American products. Canada agreed to delay those tariffs for 30 days and will commit more resources towards border security, Trudeau wrote on social media.
