Arizona business leaders worry that tossing NAFTA would harm economy

Posted at 6:01 PM, Feb 01, 2017

President Donald Trump has vowed to bring jobs back to America. To fulfill that promise, the president signed an executive order last week, pulling out of the Trans-Pacific Partnership.

"Great thing for the American worker, what we did," Trump said.

Now business leaders are worried about what this could mean for NAFTA or the North American Free Trade Agreement. 

The Trump administration has left that untouched for now, but there is growing concern among the business community in Arizona that scrapping the agreement, or imposing tariffs on Mexican imports, would hurt all U.S consumers and impact tens of thousands of jobs in Arizona.

The president told a group of business leaders that he wanted to even out the playing field and put America rirst in all future trade deals.

"The world has taken advantage of us for many years," Trump said.

Over the weekend, there were talks of a 20 percent border tax on imports from Mexico and other countries with which the U.S. has trade deficits. The move was suggested as a solution to generate more money for the border wall.

"You know it's going to be felt in everything if that happens.  Whether it's buying avocados, buying a refrigerator, or buying a TV," said Han Marshall, the community and economic development department executive director for the city of Phoenix.

Marshall added that the city remains cautiously optimistic that the NAFTA agreement would not change much.  If it did, Marshall said it could be very disruptive to the Arizona economy.

About 115,000 jobs are directly tied to NAFTA in Arizona. Electronics are the state's biggest exports. Cars were also a big one, as many Arizona companies created automobile parts that were shipped to Mexican factories for assembly then sent back to the U.S.

Marshall said a typical Toyota for example, was be shipped back and forth across the border at least six times before it was available for sale. 

"Would this mean, double or triple taxation?" Marshall asked.

Those supporting the [resident's executive order said even the administration planned to take a fresh look at every trade deal; to see if it fit America's interests first.

"We're going to stop the ridiculous trade deals that are taking everybody out of our country and taking companies out of our country and it's going to be reversed. I think you're going to have a lot of companies come back to our country, " Trump said.

Some worried — at what cost? Allied Tool and Die Company had been in business in Phoenix for 66 years. They have about 85 employees. CEO Bill Jordan worried that if NAFTA was scrapped, it could have an economic impact on his company.

"If the US withdraws or puts on punitive tariffs, costs will go up. People will buy less, and the economy will slow down. If the economy slows down, everybody has lay-offs," Jordan said.

Many Arizona business leaders agreed — there needed to be some sort of trading agreement between Mexico and Arizona, too much is at stake.