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MarketsNewsTrucking

Borderlands: San Antonio scores $1 billion in new projects; U.S. cuts deal averting 25% tariff on Mexican tomatoes

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: San Antonio secures $1.2B deal with manufacturers; United States ends Mexican tomato investigation; Otay Mesa adds industrial park along US-Mexico border; CBP seizes $1M worth of drugs at the Pharr International Bridge.

Proximity to Mexico helps San Antonio secure $1 billion deal with manufacturers

In the span of several days, the city of San Antonio announced new deals with auto manufacturers Toyota, Navistar and Aisin AW. 

The investment from the three international companies means more than $1 billion in new projects for the fast-growing San Antonio region, officials said.

Toyota announced a $391 million upgrade of its current facility in San Antonio. Aisin AW and Navistar announced new projects worth a combined $650 million and 1,500 jobs.

“It’s been a billion-dollar week,” said San Antonio Mayor Ron Nirenberg during a press conference held on Sept. 19.

The new investments build on Toyota’s existing San Antonio infrastructure and takes advantage of the city’s proximity to the U.S.-Mexico border, officials said. 

The auto manufacturer opened its Tacoma/Tundra plant in 2003, where it employs almost 6,000 people through a network of 23 onsite suppliers.

“Without Toyota, I do not believe we would’ve attracted Navistar,” said Bexar County Commissioner Nelson Wolff, one of the officials who help negotiate Toyota’s move to San Antonio. 

Officials in San Antonio tout the city’s location near the Texas-Mexico border as a reason for attracting large manufacturers. Courtesy photo

“Bexar County has, for many years, been touting the strength of our Texas-Mexico region as a platform for vehicle production,” Wolff added.

On Sept. 19, Navistar International announced it will build a $250 million manufacturing facility employing 600 people. The San Antonia factory will make Class 6, Class 7 and Class 8 trucks.

Navistar officials said easy access to the Interstate-35 corridor will reduce overhead and improve logistics. 

“This investment will improve quality, lower costs and provide capacity to support anticipated industry growth,” Navistar chief executive Troy Clarke said in a statement.

The location of Navistar’s new plant has not been finalized, but it will likely be near Toyota’s facility on San Antonio’s south side. Navistar is expected to use some of Toyota’s suppliers and bring others to San Antonio, Wolff said.

Clarke said another reason San Antonio was chosen was its proximity to Navistar’s mammoth truck manufacturing plant near Monterrey, Mexico. Navistar also has a parts distribution center in Queretaro, Mexico.

Like Navistar, Toyota has several manufacturing facilities in Mexico that make up an important part of its vehicle supply chain.

Japan-based Aisin AW announced Sept. 18 it would build a $400 million auto transmission plant in Cibolo, Texas, just north of San Antonio. The new factory will employ 900 people.

Aisin is one of Toyota’s main parts suppliers, and like Navistar, also has a large factory near Monterrey, Mexico.

“The state of Texas has many car manufacturers and auto parts manufacturers, creating car-related jobs for approximately 43,000 people,” Aisin officials said in a press release. “Aisin will contribute to the further development of this rapidly growing auto industry in Texas.” 

U.S. and Mexico cut deal to avert 25% tariff on Mexican tomato imports

Mexican tomato growers and the U.S. Department of Commerce signed an agreement on Sept. 19 ending a months-long anti-dumping investigation into imported Mexican tomatoes.

The deal raises the floor price for Mexican tomatoes but nixes a 17.56% duty that has been in place since May and was set to increase to 25% if a deal could not be reached.

The new agreement is a “step in the right direction to stop further injury to American farmers caused by dumped Mexican tomatoes,” Florida Tomato Exchange officials said in a statement.

The U.S. imports about $2 billion of Mexican tomatoes annually. Image: Shutterstock

The deal “includes strong monitoring, enforcement and anti-circumvention provisions, including border inspections, that should help eliminate the injury to American tomato farmers caused by dumped Mexican tomatoes,” said Michael Schadler, executive vice president of the Florida Tomato Exchange.

That view contrasts with concerns expressed by many Mexican tomato growers and American importers, who said the new tomato deal may hamper trade at the U.S.-Mexico border.

One of their concerns is a provision that requires inspections of up to 92% of all lots of tomatoes from Mexico at the U.S. border.

“At that level, the inspections are not only unnecessary, they also have the potential to destabilize the U.S. tomato market,” according to a statement from Lance Jungmeyer, president of the Nogales-based Fresh Produce Association of the Americas. 

The U.S. imports about $2 billion of Mexican tomatoes annually. The commerce department says the new deal will benefit tomato producers in Florida, Texas and Arizona.

New industrial park development coming to Otay Mesa port of entry

Site work is wrapping up on the $40 million first phase of the 311-acre Otay Crossings Commerce Center at the Otay Mesa port of entry along the U.S.-Mexico border in southern California, according to nbcsandiego.com.

The Otay Crossings Commerce Center “is the largest industrial development since before the Great Recession,” said Jeffrey Givens, senior vice president of Kearny Real Estate Co.

The first phase of the development includes a 40-acre emergency driving course for the California Highway Patrol. The rest of the first phase-site is being marketed to builders as potential warehouse space.

The project is adjacent to the planned new U.S Port of Entry and the final extension of state Route 11 that will connect the existing state Routes 905 and 125.

Around 90,000 trucks a month pass through the Otay Mesa border crossing, according to the California Department of Transportation – carrying everything from TVs, medical devices to cars/auto parts. 

CBP seizes $1 million worth of drugs inside a commercial truck at the border

Officers with U.S. Customs and Border Protection seized more than $1 million worth of heroin and cocaine hidden inside a commercial truck attempting to enter the U.S. at the Pharr-Reynosa International Bridge.

The incident occurred on Sept. 14, when CBP officers working at the Pharr-Reynosa International Bridge cargo facility inspected a tractor-trailer arriving from Mexico with fresh produce.

CBP officers discovered 11 packages of alleged heroin valued at $1.1 million, and one package of alleged cocaine valued at $21,000, hidden within the Freightliner tractor.

CBP officers discovered packages of heroin valued at $1.1 million in a commercial truck at the border. Image: Customs and Border Protection

“I commend our officers for discovering these narcotics by utilizing technology and officer experience,” according to a statement from Carlos Rodriguez, director of the Port of Hidalgo/Pharr/Anzalduas. “Being able to detect inconsistencies within vehicles or with people is crucial in the performance of our daily duties.”

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Noi Mahoney

Noi Mahoney is the Cross-Border Freight Market Reporter for FreightWaves.com. He graduated from the University of Texas at Austin with a degree in English in 1999. Mahoney has more than 20 years experience as a reporter and editor. He has worked for newspapers in Florida, Maryland and Texas.

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