It continues to be a bumpy ride on stock markets around the world, as countries and businesses deal with the impacts of new tariffs imposed by the Trump administration last week.
These new tariffs do not affect either Mexico or Canada — Arizona’s two biggest trading partners — although earlier ones do. All of this got Arizona Republic editorial page editor Elvia Díaz and her colleague, Joanna Allhands, thinking about how these tariffs may impact the state.
Díaz joined The Show to talk more about what they found.
Full conversation
MARK BRODIE: Elvia, we’ve seen the impact on the stock market over the past few days, but what are some of the effects you and Joanna were thinking about specifically here?
ELVIA DÍAZ: Well, when we were writing initially, we were thinking about Mexico and Canada because Mexico is Arizona’s largest trading partner. And within a few minutes, we found out — just like the rest of the world — that Mexico and Canada were actually exempt from the new tariffs that President Trump was imposing.
However, there are so many other things that are still going to be a factor because Trump had already placed 25% tariffs on Canada and Mexico. That’s separate than the ones he announced last week that are not part of the trade agreement. And that includes cars, imports and parts.
And that’s huge for Arizona and Mexico. So we were looking at that. And you and I know that the stock market has been absolutely terrifying since then.
MARK BRODIE: Does it seem as though economists have a sense yet of what those tariffs — the ones that were placed on Canada and Mexico originally — what the impacts will be, or is it still maybe too soon to say?
DÍAZ: I think it’s still too soon. And I had been monitoring what Mexico is saying. And you saw the Mexican president sort of celebrating, and rightly so. However, again, the automobile industry between Mexico and Canada is huge. And so they said they’re going to keep negotiating. But right now that’s going to be a huge hit.
And also what Joanna and I were looking at, it’s how prices are going to go up regardless. So what Mexico and Arizona, specifically the U.S. and services that are part of the North American Free Trade Agreement — or that was the old name. But, you know, the trade between the three countries included agriculture and food, chemicals, clothing, medical devices and pharmaceuticals, etc.
So that is huge. However, even those prices, I have seen that they have gone up in the past few days. You know, I specifically was looking for avocados from Mexico, which obviously are excluded in this new tariff. So, if you go to any grocery store, you will see that it has gone up. You know, I was shopping at a local Costco over the weekend, and it was $10.49 for six avocados.
And I looked to see if they were from Mexico, and sure they were. And that was up from $4.99 less than a year ago. So that’s a huge increase without the tariffs. So that’s why I was also concerned that companies are just going to jack up prices just because they can.
BRODIE: And Elvia, you mentioned Mexico, of course Arizona’s biggest trading partner. Canada is Arizona’s second biggest trading partner. And these tariffs could impact not only goods that are coming into the U.S. and into Arizona, but also goods that Arizona companies are shipping abroad, right?
DÍAZ: Yes. And that’s why Joanna, my colleague, was writing about that. Although it is great news that Mexico and Canada were exempt from the new tariffs. I mean, Arizona does business with countries around the world, and we outsource services as well. Semiconductor, for instance, we import workers as well, you know, to help us.
And she was also concerned about water and some other things. So, no. Arizona is connected to the world. And we’re going to see the impact. And we’re seeing that now because trade and economic development is also based on human instinct and human feeling.
And you have seen the stock market, and I by no means know the market very well. But I know when it’s up and down and if anyone has a 401(k) or retirement or have any kind of stocks, they know that they are losing a huge amount of money.
And that’s just not good for the world economy. That’s not good for the United States. And everyone who knows about this just knows that it’s not going to be good in the short term. But it will even be worse in the long run.
BRODIE: Well, President Trump and his administration are acknowledging that there might be some short-term pain here but are confident that these tariffs will lead to more investment in the U.S., more wealth in the U.S. It sounds like you’re not convinced, though.
DÍAZ: No, no. Of course not. And every single expert that I have been reading over the weekend and even before — Republican or Democrat — have been saying this same thing. This is just dumb. The Wall Street Journal, which is sort of a conservative voice, has been saying for weeks now that this is incredibly dumb, that this could put us into a recession similar to the 1930s.
Let’s hope not, right? I mean, Trump just seems to live in the 1950s, and everyone seems to agree on this weird notion that we’re going to go back to the golden age where we’re manufacturing everything ourselves here in the United States. Well, that’s good and dandy, but that’s not going to happen. Not the way that we are interconnected right now.
So things are not going to go well any time soon. And you know what: If, if the president is so convinced that this is great — as he actually shared this morning Monday, you know, “Don’t b weak. Don’t be stupid. Hang in there. Remain strong.” Well, people are losing their savings, their retirements, things are going up. This is real.
So now, a few minutes ago, I was reading that some of the president’s folks were thinking that maybe he will pause all the tariffs for 90 days. So if he’s so sure, he wouldn’t be doing it and being so stubborn as he is right now.
