MCALLEN, Texas - The City of McAllen is not doing enough to market its foreign trade zone to potential investors, said a top licensed customs broker who operates across the South Texas region.
Jorge A. Torres is founder, president and CEO of Interlink Trade Services, which provides consultancy, logistics and brokerage services to companies moving products across the U.S.-Mexico border.
“I mentioned this to Ralph. Because of the tariffs and the re-shoring and some of the manufacturing that might pick up here in the area, setups, manufacturing facilities, we need to look at the (McAllen) Foreign Trade Zone as a tool to market the region,” Torres said.
The “Ralph” Torres was referring to was Ralph Garcia, interim chief operating officer for McAllen Economic Development Corporation. Torres made his comments when he gave the Industry Report for MEDC at its Quarterly Stakeholders Meeting.
“We need to incorporate it [the FTZ] into everything we do, because foreign trade zones are a key element for tariff deferment and tariff avoidance. As we have a foreign trade zone, we need to promote it. We need to use it to market our region. I do not see that we are using it, for whatever reason,” Torres said.
“El Paso and Laredo and San Antonio are promoting [their foreign trade zones] heavily," Torres said. "Actually, tomorrow, I have a meeting with a manufacturing company that set up in San Antonio. They are using the foreign trade zone in the San Antonio. I am going to meet with them for customer brokerage and consulting. But it is interesting to me that [they tell me], ‘oh, we are doing great, San Antonio is helping us through their foreign trade zone.’ We need to incorporate our foreign trade zone in our promotional efforts. We need to make sure that that happens.”
Elizabeth Suarez, president of MEDC, responded that she is already working on it. She said she has reached out to McAllen Foreign Trade Zone to discuss increased collaboration.
“One of the missions they [McAllen FTZ] are tasked with is to support all the economic development efforts [of the City of McAllen,]” Suarez said. He [Mark Garcia, president of McAllen FTZ] has been receptive. He is part of our engagement committee. We did make a formal invite to have the FTZ have a representative on the EDC board. They did not accept that invite, at the moment, but we continue to work with them to stay engaged.”
Suarez said she agreed with Torres’ analysis that there are good opportunities to land manufacturing companies through re-shoring and near-shoring. Torres had earlier said he disagreed with the analysis of a representative from the Dallas Federal Reserve who said, at a recent McAllen EDC Trade Talks event, that the prospects for the region to lure companies from abroad were not that great.
“You (Torres) are right, the Federal Reserve guy that came in, he talked about the numbers in the past and the trends he has seen. But what we are seeing on the ground is that there are a lot of new opportunities,” Suarez said, "Before Torres gave his Industry Report, MEDC’s Garcia had given his EDC Prospect & Project Activity Report. Torres said he liked the positivity Garcia had shown."
“Ralph was mentioning about seeing an increase in manufacturing. I see that with USMCA, with the tariffs. I want to be very upfront, we had the Trade Talks, and I tend to disagree with the speaker from the Fed. I do see opportunity for our region with re-shoring and near-shoring. There is evidence of that, so we need to keep an eye on that in promoting our region,” Torres said.
Torres started his report by discussing the impact of the Trump Administration’s tariff policy.
“As far as the industry impact is concerned, most companies have learned to adapt to the tariffs. They are very complicated, but they are stepping up to the platter. So, we have seen some stability, quote-unquote, as far as being able to manage and monitor their impact.”
Torres said new tariffs have been implemented recently.
“We do have new tariffs that were implemented in October, November, such as Section 232 tariffs on certain wood products, such as cabinets and upholstered furniture. Those two products in particular, those Section 232 tariffs, have had an impact on some of the local industry, such as MasterBrand and Steelcase.”
Torres said new tariffs have also been implemented for heavy trucks and heavy truck parts. He predicted these will have an impact on some local companies.
“We are also foreseeing an increase or additional product codes, or tariff codes for Section 232 tariffs for steel and aluminum, before the end of the year. So, we keep monitoring the tariffs. We keep industry updated on that as well.”
Torres said there were two “big ticket items” that everyone in the international trade community is currently focused on. He said one is a court case that could determine the extent to which the President can unilaterally set tariff policy. The other is the renegotiation of revision of the US Mexico Canada Agreement (USMCA).
“The IEEPA tariff Supreme Court case hearings were held on November 5. There were almost three hours of hearings. It seems that the court, the judges, might decide that the tariffs were not legal. Obviously, the whole thing here is, does the President have legal authority to impose tariffs through IEEPA? It seems that they (the Supreme Court) might rule against that,” Torres said.
IEEPA stands for International Emergency Economic Powers Act. It is a US federal law that allows the President to regulate economic transactions and impose sanctions in response to a declared national emergency.
If the court does rule against the administration, Torres said, it does not mean that tariffs will, all of a sudden, go away.
“We have a lot of importers asking, well, when am I going to get my money back? When am I going to get my money back? One thing that is important is to decide. The second thing is the mechanism. If there are going to be refunds, what is the mechanism? We are still trying to figure out what's going to happen,” Torres said.
The ruling was expected in early summer 2026, according to Torres. However, there are reasons to think it could be sooner.
"Everyone thinks it is going to be sooner, perhaps December of this year, or maybe early next year, January timeframe," Torres said. "The President is pushing for that because it's critical for him (to get this out of the way) before the midterm elections.”
Torres said the President does have other mechanisms through which he can implement tariffs, such as Section 232 and Section 301.
“It is not, if IEEPA goes away, that there are no more tariffs," Torres said. "Under IEEPA, yes, there might be some refund opportunities. But the President is going to go back and use those mechanisms (that he can), like he has been using now to impose the tariffs on wood and stuff like that, under Section 232. With those provisions, he has the right, the authority. At least during the Trump Administration, we are going to continue to see tariffs. They might be reduced, as he negotiates with different countries. In fact, I do not think they are going to go away, even if a new administration comes in, even if it is a Democratic administration. That is because, once tariffs are set up, it is hard to get rid of them. We might see tariffs gradually decrease, but we are going to see tariffs for quite a while.”
Torres said negotiations over a revision to USMCA will take place through the middle of next year.
"Everyone is expecting that USMCA will continue," Torres said. "However, there are a lot of things at stake, so we will just have to evaluate and see and monitor what each country is doing. Obviously, one of the big things that Mexico wants is Section 232 tariffs to go away for Mexican USMCA originated products. So that is on the table. But the U.S. has a lot of pressure on Mexico for many reasons, as you are aware. It is going to be interesting to see how it all plays out.”
