El Paso business leaders anxiously await details of Trump's 25% tariffs against Mexico

USA Today

31-01-2025

El Paso business leaders anxiously await details of Trump's 25% tariffs against Mexico
Business leaders along the U.S.-Mexico border are anxiously holding their breath while they await details of President Donald Trump's plan to impose big tariffs on Mexican imports, which account for billions of dollars of trade in this region.
A White House official said Friday, Jan. 31, that the Trump administration's proposed 25% tariffs on Mexico and Canada would be implemented Saturday, Feb. 1.
Trump has said the tariffs are sanctions against the two countries for not taking more decisive actions to halt the flow of undocumented immigrants and illicit fentanyl trafficking into the United States.
In his first term as president, Trump used tariffs as a negotiating tool. Days ago, he succeeded in getting Columbia leaders to accept deportees from the U.S. after he threatened to impose 25% tariffs on Columbian imports.
'It's uncertainty that is hurting us as a region because no one can make plans until we have clarity on what are the rules," Alan Russell, co-founder and CEO of El Paso's Tecma Group of Companies, which manages 90 maquiladoras, or factories, in Mexico for companies in the U.S., and elsewhere.
"I'm optimistic this region is going to be swinging and growing with the (continued) relationship with Mexico," Russell said.
That optimism largely stems from Russell's belief that Trump is unlikely to impose a blanket 25% on all Mexican products, many of which are auto parts and other products made by U.S. companies at factories in Mexico and shipped to the United States.
A blanket 25% tariff on all Mexican imports "sounds pretty unreasonable, therefore we probably can assume there will be categories of tariffs," with some products exempt and some as high as 25%, Russell said.
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Jerry Pacheco, president of the Border Industrial Association in Santa Teresa, New Mexico, an industrial logistics hub adjacent to El Paso, said he also sees company officials holding off on plans until they see what will happen with tariffs.
"A blanket tariff would be so disruptive" to the manufacturing and logistics industries in this area, he said.
"A lot of things could happen. He (Trump) may impose tariffs on a select few items, like Mexican steel or Mexican auto products, or he may impose tariffs and make them effective at a later date so more negotiations can go on," Pacheco said.
Jon Barela, chief executive officer of the Borderplex Alliance, an El Paso-based economic development organization, struck a more alarming tone.
'The Borderplex region, which thrives on cross-border commerce, stands to lose significantly from these tariffs,' Barela said in a written statement.
'Imposing these tariffs risks reversing years of progress in building a robust, integrated economy that benefits both sides of the border and creates a chilling effect on regional and national economic growth for years to come," Barela said.
Much of the manufacturing in this area is done in maquiladoras, or factories, in Juárez, run by companies from the United States and other countries. Many El Paso-area companies support the maquiladoras by making parts for the Mexican plants and operating warehouses and other logistics operations for the assembled products coming out of Mexico.
Barela urged policymakers to reconsider implementing the tariffs and continue to promote economic collaboration between the U.S. and Mexico.
Russell and Pacheco said no matter what happens with the tariffs, cross-border commerce will continue.
"Cross-border trade will still happen. But we, the consumers, are going to pay more for products," Pacheco said.
Vic Kolenc may be reached at 915-546-5421; [e-mail]; @vickolenc on Twitter, now known as X.