Otay Mesa, CA – PG Forest Products, a lumber company located in Otay Mesa, has been a critical player in the cross-border wood trade for the past decade, shipping American and Canadian wood to Mexico. On any given weekday, the company prepares and loads between 10 to 20 trucks filled with timber destined for various locations throughout Mexico, including Cabo San Lucas and the state of Sonora.
Aldo Morales, the general manager of the company, sources lumber along the Interstate 5 corridor, stretching from Canada down to Washington and Oregon. However, recently implemented tariffs by the Trump administration, which impose a 25% duty on Mexican and Canadian products, have raised significant concerns for Morales and his small team of 12 employees.
“My main worry is that Mexico will retaliate and introduce its own tariffs on U.S. products,” Morales expressed. The potential for reciprocal tariffs has left him apprehensive, not only from a consumer perspective but also in terms of business viability. “If there’s a need for a 25% increment in anything, no one is going to want that. At the end of the day, everything bounces back to the consumer; there’s no way any business can absorb a 25% tariff,” he added.
Morales highlighted the complexities that tariffs introduce for logistics, as they must be included in the truck manifests detailing the value of the products being transported. “You can’t ask them to bill you and pay it later,” he stated, emphasizing the commitment required at the point of entry into a country.
In light of the potential economic impact, Morales noted that businesses will likely seek ways to reduce operating expenses, including labor costs. “We have to wait and see how everything pans out; our workforce is the last piece of our efforts that we want to reduce,” he said, underscoring the uncertainty hanging over the industry.
Adding to the tension, Mexican President Claudia Sheinbaum announced intentions to implement tariffs on U.S. products, further escalating the trade conflict. Canadian officials have also indicated that they will consider similar measures against U.S. goods in response to the ongoing tariff disputes.
As trade negotiations continue, the future of cross-border commerce remains uncertain, leaving companies like PG Forest Products watching closely to navigate these challenging economic waters.
