EL PASO, Texas (Border Report) – The Trump administration’s on-again, off-again tariffs on Mexico and Canada already are costing businesses money and residents jobs in border cities like El Paso and Juarez.
“There certainly have been some jobs at least put on hold and we’re hearing from employers in the region second-guessing whether they should even be involved in (the U.S.-Mexico-Canada Agreement) because of its unpredictability,” said Jon Barela, chief executive officer of the Borderplex Alliance, “and that maybe they should go to other regions and other countries that have some level of predictability.”
Border Report Live: Trump’s on-again, off-again tariffs add to confusion
President Donald Trump on Tuesday enacted 25% tariffs on all Mexican imports to the United States and in most merchandise coming from Canada. On Thursday, he put on pause for a month most imports related to the USMCA.
Trump put all tariffs on hold back in February and few know what he will do in April.
Trump says he’ll delay tariffs on Mexican products covered by free trade deal
Barela, whose organization promotes investment in the El Paso-Juarez-Las Cruces, New Mexico, region, worries small short-term losses may turn into substantial missed investment opportunities in the long term.
“The people who are involved in making investing decisions are on freeze. They’re pausing their decisions. They invest tens if not hundreds of millions of dollars and they can’t simply turn on a switch and decide to move to the United States. It doesn’t happen that way,” Barela said. “In the long-term, if we don’t get this straightened up, it will certainly hurt U.S. revenues.”
Part of the uncertainty is not knowing what Trump’s end game is. He has complained of other countries “taking advantage” of U.S. generosity and buying less from America than they are selling to this country. He has also accused Canada and especially Mexico of not doing enough to stop the flow of migrants and illicit drugs like fentanyl to the United States.
Mexico’s top general admits US drone surveillance flights led to cartel arrests
Mexico last month allowed U.S. spy drones to fly over its territory and sent planeloads of dangerous drug traffickers to be prosecuted in American courtrooms.
Barela said he may be trying to get an advantageous position when the USMCA comes up for review next year. But nobody really knows.
Brief tariff period halted 30% of Tijuana product deliveries into US
Marcelo Vasquez, regional director of the National Association of Mexican Importers and Exporters, said some employers in Juarez are already renegotiating labor contracts knowing they will have to lay off workers if the tariffs stay beginning next month.
Others, meantime, are rushing to complete orders for parts or products and get them across the border before Trump decides to reinstate the tariffs.
“Many maquiladoras are asking their suppliers for many things including pallets” to cross as much merchandise as possible, Vasquez said. “There are those who are working frantically and others that were already hurting (economically) and have slowed down even more.”
Tariffs caught many maquiladoras in Tijuana by surprise
He said export activity plummeted during the two days the tariffs were in force. In Juarez, shipments dropped by 20 percent while other cities in Tamaulipas state opposite South Texas saw as much as an 80 percent drop.
Mexican Economy Minister Marcelo Ebrard on Friday said Trump’s pause spells about 85% of Mexican exports from tariffs. He said Mexico is working with the other 15% of exporters so they can place their products elsewhere, and lobbying with the U.S. to reduce tariffs on steel and aluminum exporters.
Trump pauses auto tariffs, respite favors Juarez plants
The Mexican government also will work with exporters to ensure they are in administrative compliance with all the rules of the USMCA. Internally, Mexico has a $200 billion economic development fund it will deploy to counter tariffs.
“Despite the issue of the tariffs, businesses from abroad will continue to invest in Mexico,” Ebrard said at a news conference on Friday. “We will continue to invest (domestically). There is trust and there is respect.”
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Mexican President Claudia Sheinbaum earlier this week called for a massive rally in Mexico City’s Zocalo square Sunday to announce retaliatory tariffs against the United States.
The rally is still on, but Mexican officials are now referring to it as a festival where Sheinbaum plans to highlight Mexico’s resolve amid the threats.
