TRUMP TAX TRICKLE DOWN

Chicago busi­ness own­ers say we’ll end up pay­ing an even higher pre­mium if pres­i­dent’s pro­posed 20 per­cent tar­iff on im­ports from Mex­ico is en­acted

Chicago Sun-Times - - CITY BEAT - BY SANDRA GUY For the Sun- Times MARY MITCHELL is on as­sign­ment

Pres­i­dent Don­ald Trump wants to im­pose a 20 per­cent tax on goods im­ported from Mex­ico, but if you’re plan­ning on pick­ing up a wool- and- leather hand­bag im­ported from Mex­ico or to have a Mex­i­can beer at your lo­cal tav­ern, you’d pay an even higher pre­mium, Chicago busi­ness own­ers say.

That’s be­cause Mex­i­can im­porters of ev­ery­thing from handbags to sugar to av­o­ca­dos likely would raise their prices as a de­fen­sive mea­sure even be­fore the U. S. tar­iff was im­posed, if in­deed it ever takes ef­fect, they say.

“I do think we would lose busi­ness on our Mex­i­can- made goods,” says Al­li­son Geit­ner, man­ager of Green­heart Shop, a fair- trade gift, cloth­ing and home decor store at 1714 N. Wells in Old Town.

So, to try to make up for that, Geit­ner says, “The price would def­i­nitely go up.”

On Fri­day, the Green­heart Shop had new of­fer­ings on dis­play of hand­crafted Mex­i­can handbags and duf­fel bags rang­ing from $ 100 to $ 360. It sets profit mar­gins at 50 per­cent — stan­dard, ac­cord­ing to Geit­ner, for goods whose cre­ators get paid a liv­ing wage.

An­other 20 per­cent price in­crease would make the Mex­i­can im­ports “re­ally dif­fi­cult to sell,” Geit­ner says.

She doesn’t think the pro­posed tar­iff on Mex­ico would last long be­cause of the im­pact it would have on Amer­i­can con­sumers.

Bar- food fa­vorites such as Mex­i­can av­o­ca­dos for gua­camole and other dishes would be sure to go up more than the cost of a 20 per­cent tax in­crease, says Daniel Ghaowi, op­er­a­tions man­ager at AMK Kitchen Bar, 1954 W. Ar­mitage in Buck­town. Ghaowi says he could even see restau­rants bump up prices 30 per­cent be­cause greater de­mand and costs would get tacked on.

Av­o­ca­dos are sell­ing for $ 2.90 a pound, on av­er­age, he says.

Ghaowi says he would be forced to redo about one- third of his menu if he had to re­place Mex­i­can-im­ported av­o­ca­dos as well as Mex­i­can toma­toes, jalapeños and ar­bol chile pep­pers from south of the bor­der and spir­its such as tequila and mescal with lo­cally sourced prod­ucts. He says it would be tough to re­place such im­ported items be­cause lo­cal farm­ers couldn’t pro­duce them in the quan­ti­ties a restau­rant re­quires.

“It’s not as much a tax on Mex­ico as it is a tax on the Amer­i­can peo­ple,” Ghaowi says of Trump’s Mex­ico tax.

Such a tar­iff also would make it harder for mo­mand- pop restau­rants such as AMK, which has been open for a year and a half, to com­pete against chain restau­rants that could more eas­ily ab­sorb the ex­tra ex­pense, he says.

Chicago is home to ma­jor fruit, pro­duce, sweets and liquor dis­trib­u­tors in­clud­ing La Preferida, La Galera Pro­duce, La Bodega Pro­duce and Iñiguez Pro­duce and candy im­porter Dul­celandia that trans­port Mex­i­can- im- ported goods. They could be hurt, too, ac­cord­ing to Jaime di Paulo, ex­ec­u­tive di­rec­tor of the Lit­tle Vil­lage Cham­ber of Com­merce.

Di Paulo says 80 per­cent of the cham­ber’s 800 busi­ness mem­bers im­port goods from Mex­ico.

“It would af­fect ev­ery­body,” he says, not­ing that Mex­ico sup­plied 69 per­cent of U. S. fresh- veg­etable im­port value and 37 per­cent of U. S. fresh- fruit im­port value in 2012, ac­cord­ing to U. S. Depart­ment of Agri­cul­ture data.

U. S. im­ports of Mex­i­can fresh fruit to­taled $ 2.86 bil­lion in 2012, with the value hav­ing risen by an av­er­age of about 20 per­cent a year from 1999 to 2012, the data show. By com­par­i­son, the value of U. S. im­ports of Chilean fruit to­taled $ 1.22 bil­lion in 2012, up an av­er­age of 10 per­cent a year over the same pe­riod.

Craig Bolanos, CEO and founder of In­ver­ness re­tire­ment ad­viser Wealth Man­age­ment Group, says he is ad­vis­ing busi­ness own­ers not to panic be­cause the stock mar­ket’s re­ac­tion shows Wall Street sees Trump’s pro­posal as a ne­go­ti­at­ing tac­tic rather than a likely re­al­ity.

“With the Dow still above 20,000, traders, in­vestors and other stock mar­ket par­tic­i­pants be­lieve it’s rhetoric — aka ‘ the art of the deal,’ ” Bolanos says.

| JAMES FOS­TER/ FOR THE SUN- TIMES

Al­li­son Geit­ner, man­ager of Green­heart Shop in Old Town, says prices on handbags and other goods im­ported from Mex­ico would likely go up even more than the 20 per­cent tax that Pres­i­dent Don­ald Trump is propos­ing.

Pres­i­dent Trump

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