“With everything we’re doing, at what point do we jab them enough that Mexico just gives us the middle finger?” one store owner said.

The edges of this small border city bustle with activity as construction vehicles clear flat expanses of land for massive warehouses, and semi-trucks moving American and Mexican goods appear to cover every inch of roadway.

To James Gonzalez, 33, the sterile, boxy buildings and traffic congestion only a few miles from the five bridges that connect the U.S. to Mexico represent financial success and future business opportunities.

The city’s fortunes, based entirely on trade between the two countries, is forever tied to the United States’ kinship with or animus for its southern neighbor. The closeness of that relationship can sometimes make the restrictive lines of the national border feel blurry, but with the Trump administration’s recent threats of a trade war, they have become increasingly stark.

Until Friday night, it looked like President Donald Trump would punish Mexico — and thus Laredo — with tariffs on all goods that come north across the border. That threat was lifted because of a vague agreement about immigration, but residents here know it could be reimposed at any time, damaging their business relationships.

“We’re just the canary in the coal mine here,” Gonzalez said between sips of a hot cortado coffee on a weekend when temperatures rose above 110 degrees. “We’re the bellwether because if the relationship is going well, then we’re doing well.”

The Gonzalez family’s auto parts business opened in Laredo in 1934 and now has storefronts from Monterrey, Mexico, to San Antonio, Texas, with more locations fanning out along the border. They have already had to raise prices because of tariffs on goods made in China, but because 20 percent of their products, from air filters to radiators, are made in Mexico, they fear another price hike is on the horizon should the relationship deteriorate.

Gonzalez said tariffs on the United States’ southern neighbor and any retaliation from Mexico could lead to his family closing stores, threatening their 24 locations. Read more

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