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Donald Trump's career in business has not won over one important constituency for him in Arizona ahead of that state's primary next week: the business community. Many Arizona business leaders worry that if elected, the Republican front runner's rhetoric on immigration and Mexico could prompt an economic backlash, something Arizona has experienced recently.

Six years ago Arizona lawmakers passed a bold immigration enforcement law, SB 1070. The law as written made it a state crime for unauthorized immigrants to seek work, mandated legal immigrants carry their documents and required police to ask about immigration status.

But the 2010 immigration bill had an unintended consequence: the bill made the state a target of economic boycotts.

While the law made Arizona and obvious place for Trump to hold one of his first campaign rallies last summer, the very convention center in Phoenix where Trump spoke saw a 30 percent drop in bookings after the law passed and some blamed an anti-SB 1070 boycott against Arizona.

A binational conference in Arizona between governors on both sides of the border was cancelled because the Mexican politicians indicated they would not set foot in the state.

"We were known for all the wrong reasons for a while, being a place that was not seen as welcoming to outsiders," said James Ahlers, general counsel at the Phoenix-based government and public affairs firm Molera Alvarez.

His firm now has a contract to represent the city of Phoenix's trade interests in Mexico – one of the efforts the city has made in the wake of SB 1070 to improve the city's relationship with Mexico.

Eventually federal courts threw out major sections of SB 1070, but even six years later, Ahlers says the law remains a major topic in Mexico.

"We do get questions about 'Why should we work with Arizona? How do you view immigration? Have your attitudes changed from what we saw several years ago with SB 1070?'" Ahlers said.

Local and state leaders have made a point of traveling to Mexico to repair and strengthen trade and tourism ties, and it appears to be working. Mexico is Arizona's biggest trading partner, and last year Arizona's exports with Mexico hit a record $8.6 billion.

But many in Arizona worry that some of Trump's infamous comments, such as calling Mexican border-crossers "rapists" and his demand that Mexico pay for an expanded border wall, could reverse that progress.

"Poisoning the well so to speak with some of the rhetoric you get from Trump is not good for business and the business community is concerned about that," Ahlers said.

Mexican President Enrique Peña Nieto likened Trump's tone to Hitler's earlier this month.

Members of Arizona's tourism community are concerned that if Trump makes it to the White House it could impact international tourism, particularly from Mexico. Mexican visitors spend an estimated $2.5 billion dollars a year in Arizona, according to research by the University of Arizona Eller College of Management.

"It happened to us with SB 1070, I was traveling to Mexico and people in Mexico thought that everyone in Arizona hated Mexicans," said Felipe Garcia of Visit Tucson, which promotes Tucson tourism.

Carlos Fernandez, the CEO of BF&S, an aerospace and defense company based on the Arizona border that manufactures parts in Mexico, said the reputational damage of SB 1070 in Arizona should be seen as a cautionary tale for the rest of the country this election season.

"This is a wonderful case study that we actually have in our own state about what happens if we treat our neighbors in the south as if they are not our neighbors, but our enemies," Fernandez said. "You have to look at the economics of how we suffered because of that, and that could definitely translate to the entire country."

So far, Fernandez said that his contacts in Mexico are not taking the possibility of a Trump presidency seriously.

Trump likes to say in his speeches that Mexico is "killing us" in trade. He has said American companies that move manufacturing jobs to Mexico and then sell their goods into the United States should be face punitive taxes and has said he will make changes to the North American Free Trade Agreement.

But in Arizona, there is a prevailing view among business leaders that the state's prosperity is linked to the strength of Mexico's economy.

"The better our friends in Mexico are doing, the better we are doing in Arizona," said Arizona Chamber of Commerce and Industry president and CEO Glenn Hamer.

Hamer argues when manufacturing jobs move to Mexico from the U.S., there continue to be opportunities for American companies to business with those companies across the border. He argues those opportunities would be lost if the manufacturing jobs had gone to China instead.

This primary season Hamer has been an outspoken critic of Trump's trade policies, particularly Trump's pledge to renegotiate NAFTA or his stated willingness to engage in a trade war if Mexico refuses to pay for a border wall.

"Setting off a trade war, setting off a chain reaction with our greatest friends and allies, this could trigger a Great Recession or it could trigger a depression," Hamer said.

Arizona Republicans Not Necessarily Concerned

But Trump's Arizona Campaign Chairman Jeff DeWit insists that predictions of soured relations with Mexico if Trump enters the White House are overblown.

"I just think the word will go out that America wants to do a good job with our trade deals again and we want to have a strong immigration policy," DeWit said.

DeWit, who serves as Arizona's state treasurer, acknowledged that big corporations that want to manufacture their products overseas may not like Trump's proposals, which aim to protect American jobs. DeWit says that a President Trump would make better trade agreements than past administrations.

"I think that is something Donald Trump can bring is a business minded attitude towards these deals and I think it will be better for both sides," DeWit said.

Politics and Government News

Election 2016

Jude Joffe-Block

Author

Business leaders remember an economic boycott against the state for its 2010 immigration bill and worry about international consequences of a Trump presidency.

Ahead of Arizona primary, business community fears Trump will inspire backlash

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