Trump's tariffs weigh heavily at Mexico manufacturing trade show in El Paso
Donald Trump's impending United States' tariffs against Mexico imports and on auto industry imports in particular hung heavily over a manufacturing trade show that wrapped up late this week in El Paso.
'There's a lot of uncertainty' because of the tariffs' cloud, Margarita Licon, El Paso district sales manager for Expeditors, a large international warehouse operator and logistics company with 11 El Paso warehouses, said at the company's booth at the El Paso convention center.
'A lot of companies are waiting to make decisions' about expansions and other projects, she said — a sentiment echoed by suppliers and others tied to Mexico factories at Mexico's Manufacturing Supply Chain Summit. The annual trade show is organized by Mexico Now, a trade publication for Mexico's manufacturing industry.
Alan Russell, CEO of El Paso's Tecma Group of Companies, during a trade-show discussion, said he advises his clients to not wait "on the politicians to make your decisions, or you are going to be left behind."
Tecma establishes maquiladoras, or factories, in Mexico for companies in the U.S., and elsewhere.
U.S. manufacturers continue moving factories to Juárez because they can't find workers in their hometowns, Russell said.
Oscar Dominguez, president of Lear Mexico Operations, said Mexico's automotive industry has a large, experienced workforce that can't be overlooked in companies' location decisions, even if U.S. tariffs are implemented. Lear is a global supplier of automotive seats and automotive electrical and electronic systems.
That workforce has helped Mexico become a large auto-manufacturing center, Dominguez said. He and three other experts on the Mexico automotive industry took part in a panel discussion at the trade show.
More: Trump's tariffs: What does it mean to be made in America?
Mexico is the seventh-largest auto producer in the world, with most of the vehicles exported to the United States, said Thomas Karig, an independent manufacturing consultant and former Volkswagen of Mexico executive.
It also is a large producer of components put into motor vehicles.
Juárez, just across the border from El Paso, is the second-largest auto-parts producer in Mexico, according to data the city of Juárez reported at the trade show.
Juárez has about 400 companies in the automotive manufacturing industry with about 180,000 employees, the Juárez data show.
If Trump's announced 25% tariffs on auto imports takes effect April 2 as now scheduled, it definitely will impact companies in Mexico's automotive industry, Dominguez said.
"I don't think companies (auto manufacturers) will be able to absorb all that cost," and that will result in negotiations between suppliers and the auto manufacturers, and result in suppliers and consumers having to pay higher prices, he said.
Even if some auto components covered under the United States-Mexico-Canada Trade Agreement, or USMCA, are exempted from tariffs, as has been indicated by the Trump administration, many parts will still be subject to the tariffs, he said.
Luis Gonzalez, vice president of Textape Inc., an El Paso company that produces tape used to cover automotive wiring made in Mexico, said one of his concerns is that Textape will have to absorb the tariffs' costs because, he said, automotive manufacturers don't like to accept price increases.
Other tariffs also may be implemented by the U.S. against Mexico. Trump on March delayed implementing a 25% tariff on a broad array of Mexican imports. And steel imports from around the world, including from Mexico, are subject to 25% tariffs by the U.S.
Trump also has said the U.S. will impose reciprocal tariffs April 2 on imports from countries that charge tariffs on U.S. exports.
Lear's Dominguez said the tariffs against Mexico appear to be the Trump adminstration's way to set the stage for negotiations of a new USMCA. The trade agreement is scheduled to go under renegotiation in 2026.
Salomon Noble, CEO of Intermex Industrial Parks, said he's certain Trump is using tariffs as a negotiating strategy to make what he called, USMCA 2.0, "more strigent and stronger," which he foresees will make the U.S. and Mexico better allies. Intermex is a large industrial park developer in Mexico and also helps companies establish factories in Mexico
El Paso Mayor Renard Johnson, in a short speech to the trade show, said geopolitical shifts, tariffs, disruptions in logistics, and other factors have brought a transformative moment in global trade, including for this binational manufacturing region.
"Rethinking supply chain is no longer an option, it's imperative," Johnson said.
Vic Kolenc may be reached at 915-546-6421; vkolenc@elpasotimes.com; @vickolenc on Twitter, now known as X.
More: Austin firm plans $5B high-tech campus in Santa Teresa, NM, create 1,000 jobs
This article originally appeared on El Paso Times: Trump's tariffs weigh heavily at El Paso manufacturing trade show
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