MCALLEN, Texas - One of the panel discussions at a recent Texas Hispanic Chambers of Commerce Coalition event was titled “ RGV Regional Economic Snapshot.”
But moderator Julian Alvarez, senior vice president of business development at Lone Star National Bank, steered the conversation towards higher education and workforce development.
It took Rio Grande Valley Hispanic Chamber of Commerce President Cynthia Sakulenzki to bring the discussion back to the economy. In the Q&A part of the discussion, Sakulenzki asked: “This question goes basically goes to Mario and to Rick. One of the concerns or questions is, how have the ICE raids affected us economically? Have the tariffs affected the Rio Grande Valley economically? Could you answer that please?”
The “Mario” Sakulenzki was referring to was Mario Reyna, executive director of RioPlex. The “Rick” Sakulenzki was referring to was Rick Carrera, director of economic development for the Council for South Texas Economic Progress, otherwise known as COSTEP.
The backdrop to Sakulenzki’s question is that construction companies in the Valley have complained that they cannot get the workers because of the ICE raids. The South Texas Builders Association has voiced its concern to U.S. Reps. Henry Cuellar and Monica De La Cruz, among others. The latter has said she is filing legislation to allow undocumented construction workers to get work visas.
With regard to the ICE raids, RioPlex’s Reyna answered Sakulenzki’s question this way:
“As much that we hear about ICE, I have never come across them. I have not seen anything. All I see is what I see in whatever news outlet and I get around. I get around the whole region, and I have not seen an (ICE) operation yet. People talk to me, and they do tell me that they (ICE officers) go to construction sites. But they're professional. They'll say, I'm looking for so and so and fine. So what's happening now, at least with the people that I talk to, they (construction companies) will put a fence around the construction site because you can't go in, you are not supposed to go in (if a fence has been erected). And they (ICE agents) don't go in unless they have a particular warrant for someone. So I don't have any quantifiable data to tell you something is happening. I see construction still going on.”
With regard to the ICE raids, COSTEP’s Carrera answered Sakulenzki’s question this way:
“So, I will echo some of Mario's remarks. I have not personally witnessed any activity, law enforcement activity, from the group, from ICE at all. What I see is what you see in the media, that kind of thing. And then, like Mario has said, there's construction that continues to go on throughout the area. So, I cannot really comment. Is there a key factor and do we have data to support this? What has been the impact that those raids have had? I would rather leave my comments at that.”
Reyna and Carrera also tackled the question about tariffs.
Reyna said: “I don't have any concrete data when it comes to the tariffs. Sure, I have a lot of friends that are involved in transportation and those kind of businesses. So, there's an impact that they have taken. But, at the same time, we're involved with this thing called RioPlex. And RioPlex, it's an organization that was created by the CEOs of this community. And when I say CEOs, I mean CEOs. A lot of people say I'm a CEO. No, I'm looking for a CEO that runs a multimillion dollar operation. Those are the CEOs that belong to RioPlex.
“And so what is happening now is that we're obviously promoting the region. And people are coming. Investors are coming. And when I say they come, they come in their own jets. You know, the last time we had a group of investors that came from Michoacán, the avocado people, La Bonanza, for example. They flew in their own jets. We took them around, and they did a groundbreaking ceremony, and they want to come back. And so that, that is happening a lot.
“And the region… I know of operations in Reynosa that, because of the tariffs, they just flip over here. And so that is happening. I think the business people, once you say, this is the game, they'll learn how to play the game, and they'll switch. So for us, via the tariff situation, I think it's going to be something that's going to be beneficial, because we are in between two giant economies, and this is the place where it makes the most sense.”
Carrera said: “In terms of tariffs, a couple things. So there's been… earlier last year, probably first quarter, second quarter… we're in the business of industrial recruitment, and I had a couple of really, really big projects from the foreign direct investment side. They were interested, and they've kind of put the brakes on those. That was some companies from Europe or what have you. It doesn't mean that they stopped the whole thing. They're just going to kind of wait and see what happens. Like Mario said, they're business people. They're going to wait to see what are the rules of the game. And let's pivot. How do we maneuver this?”
However, while some companies are putting their investment decisions on hold, others, particularly in Mexico, are looking to move to the U.S., Carrera said.
“We've spent a considerable amount of time in Mexico because we're getting a lot of calls from Mexico. Mostly because they want to be proactive. If they don't have an operation here in United States already, they're looking to establish at least a footprint. So, should the day come that they really need to shuttle a lot of their operation here to the United States, then the footprint is here. They're not being reactive. They're being proactive, and they can continue to do business that way.”
Carrera said COSTEP has hosted several groups from Mexico.
“We've got a big group from Index coming in February, and Index is the major manufacturing industry group in Mexico. We have all the chapters coming to visit. And as we were sitting here earlier listening to Mr. Villarreal, I was emailing and texting about another tour that we have coming up in a couple of weeks from another group. And so there's a lot of activity and it's mostly because, as I mentioned to some of you all last night, we play to our strengths here, that we're a binational region, and we can leverage the fact that we're close to Mexico, but we're still on the US side, and that really plays in our favor when it comes to the tariffs.”
Carrera then broadened the conversation to the United States-Mexico-Canada Agreement.
“That being said, it would be great to see what happens with USMCA. We had a young lady from NASCO come down and present a couple of weeks ago, actually, before the holidays, and she talked a little bit about the USMCA, and they're kind of getting an idea what's going to happen with that. But we won't know for sure what's going to happen with that until it happens, right? We could speculate about that. Speculate about that all day. But, as has been said, it's like everything else. There are advantages and disadvantages. That comes with everything that happens from a legislative standpoint, or even just a business or market standpoint. And I think that we've been able… we're going to be able to capitalize on that even more so than we have already.”
