Paul's Note - June 7, 2019

In last week’s newsletter, I had a short blurb about the tariffs that the President threatened against Mexico. In a Tweet, the President promised a 5% tariff on goods from Mexico starting next week. These tariffs could rise as high to 25% by September according to the schedule in the President’s plan.

We all need to understand what the economic impact would be to raise prices on goods from Arizona’s biggest trading partner.

According to a report from the Eller School, Arizona buys $9 billion in goods from Mexico and sells $7.65 billion to Mexico. In addition, according to my friends at Visit Tucson, Mexican visitors spend $1 billion in the greater Tucson area every year. Mexico is an important partner, and these sort of punitive tariffs will upset that relationship.

I said “punitive tariff,” but that is not the right way to put it. The people who will be suffering the immediate and direct effect of these tariffs aren’t policy makers in Mexico, but consumers who will be paying higher prices. As I stated, we import a lot of goods from Mexico and we will be paying that.

In last week’s newsletter, I quoted a figure of $2.65 billion as the hit to Arizona consumers. That’s if the full 25% tariff that the President promises is implemented. The scheduled starting tariff is only 5%. That is a hit of more than $450 million in price increases. That is the minimum impact. It’s not paid by Mexico, not paid by corporations that have moved operations there, but by you and I.

There are still some questions about whether or not the tariff will be implemented. There are questions about whether or not the President has the authority to do this under the International Emergency Economic Powers Act, whether it violates NAFTA and congress is talking about stepping in as well.

My biggest worry is the local economy. I have been gratified to see Tucson’s recovery over the last few years and this would, at the very least, slow it down. I worry about attracting new employers when one of our unique assets is our connection to Mexico. For example, just this week I met with a group that is looking to redevelop a large abandoned industrial parcel into a logistics center. They have been talking to partners in Mexico. If this escalates or becomes a long term policy, redevelopment opportunities like that will not be possible.

If you share my concerns, let your congressional representatives know.

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I’d like to thank all of you that came to another successful Ward 2 town hall on Wednesday night. One of the reports was from Scott Clark, the Director of Planning and Development Services. Clark presented three new online tools that can help keep you informed.

One is called Notice Tucson. We strive to keep the process of rezonings, plan amendments and other land use changes as open as possible, but it can be hard for even the most informed citizen to keep up. NoticeTucson is a personalized notification tool that emails citizens to inform them of opportunities for public input on proposed land-use changes. With Notice Tucson you can define a given area that you are interested in, and you will be e-mailed when there are hearings on land-use changes.

The second is the Development Activity Map, which will allow you to get a perspective on permits and special approvals in both your area and all over town. It’s color coded and pretty easy to navigate.

The third is the Inspection Portal. It will allow you to find out recent inspection activity as long as you have an address or parcel number. The link can be found around mid-page on the city’s Building Inspection page.