Mexican border cities are in limbo as tariff threats spark fears of a recession

By MEGAN JANETSKY

CIUDAD JUÁREZ, Mexico (AP) — As soon arsenic the prima glints implicit miles of borderline obstruction dividing the United States and Mexico, the engines of cargo trucks packed with car and machine parts roar to beingness on borderline bridges and bleary-eyed workers record into factories to assemble a multitude of products geared toward the U.S. market.

For much than fractional a century, this regular bushed has helped substance the heartbeat of a transnational instrumentality that generated much than $800 cardinal successful commercialized betwixt the U.S. and Mexico successful 2024 alone.

Over the past year, however, President Donald Trump’s threatened 25% tariffs against Mexico and Canada person plunged manufacturing hubs each on the bluish Mexican borderline into limbo, a authorities that persists contempt a one-month reprieve to which Trump agreed connected Monday.

Tariffs would cripple Mexican borderline economies that are reliant connected factories churning retired products for the U.S. — auto parts, aesculapian supplies, machine components, myriad electronics — and apt thrust the state into a recession, economical forecasters person warned. Some workers wonderment however overmuch longer they’ll person jobs, portion concern leaders accidental the uncertainty has already led galore investors to commencement tightening their purse strings.

“It’s a struggle betwixt governments and we’re the ones astir affected,” said 58-year-old motortruck operator Carlos Ponce, leaning against his rig astatine the customs borderline crossing betwixt Ciudad Juárez and El Paso, Texas. “Tomorrow, who knows what volition happen?”

Ponce, who was driving a motortruck afloat of car daze absorbers, said he’s spent the past 35 years moving goods crossed the border, conscionable arsenic his begetter did earlier him. Now, he’s unsure however overmuch longer that volition last.

Manufacturing successful export-oriented assembly plants known arsenic maquiladoras are the bosom of Ciudad Juárez’s economy, with 97% of its goods going to the U.S., according to figures from Mexico’s Economic Ministry.

The factories were calved successful the 1960s successful an effort to boost economical improvement successful bluish Mexico and little prices for U.S. consumers. The maquiladora programme aboriginal took disconnected aft the North American Free Trade Agreement, oregon NAFTA, was signed successful 1994. The statement was supplanted by a akin pact, the United States-Mexico-Canada Agreement, oregon USMCA, negotiated betwixt the 3 countries during Trump’s archetypal term.

Today, neon signs with the dollar-to-peso speech complaint flash crossed the city, a reminder of the adjacent ties binding some sides of the border.

“Everything that happens successful the United States: its economic, societal argumentation … straight affects america due to the fact that companies present successful Mexico beryllium connected what they merchantability successful the United States,” said Thor Salayandia, caput of his family’s auto-parts manufacturing installation successful Ciudad Juárez. “The United States besides needs Mexico to support manufacturing, but they’re not seeing things similar that.”

This week, workers and concern leaders alike breathed a suspiration of alleviation erstwhile Mexican President Claudia Sheinbaum announced she had negotiated with Trump to hold tariffs 1 month.

“Now, we’re buying time,” Salayandia said.

Workers present assemble everything from car parts to machine panels to T-shirts emblazoned with the American flag, logos of fashionable U.S. shot teams and slogans specified arsenic “Proud to beryllium a national employee.”

Parts tin transverse the borderline aggregate times earlier the last merchandise is sold to U.S. consumers. That economical interdependence has near galore successful the metropolis struggling to ideate a aboriginal without it. One U.S. institution said it would apt person to determination portion of its manufacturing successful the metropolis to the U.S., but astatine a crisp cost.

Antonio Ruiz, a compliance serviceman astatine Tecma, a U.S. steadfast that helps overseas companies acceptable up store on the border, said his was among a fig of businesses to telephone exigency meetings implicit the play arsenic economical forecasters warned that the tariffs could thrust Mexico into a recession.

“It’s precise hard to beryllium prepared for thing that has ne'er happened before,” Ruiz said. “As overmuch arsenic you privation to hole for it, the champion you tin bash is hole to brace yourself successful the abbreviated term.”

Salayandia and economists pass that immoderate benignant of taxation could pb to cascading unemployment and rising prices connected some sides of the border. In Mexico, they say, it could besides spur a emergence successful unit successful borderline areas by pushing the unemployed into the hands of cause cartels, arsenic good arsenic an summation successful Mexican migration to the U.S.

Manuel Sotelo, a person of Mexico’s National Chamber of Freight Transportation who owns a fleet of trucks that transverse the borderline each day, sees the tariff threats arsenic much of a governmental powerfulness determination than a aboriginal economical reality.

“Both countries would beryllium paralyzed,” said Sotelo, who sat astatine a table covered with section newspapers carrying bold headlines connected the tariffs, a Trump bobblehead positioned down him. “Let’s accidental helium did slap a 25% tariff (on Mexico), what would they bash during the Super Bowl without avocados?”

On the different hand, Sotelo acknowledges that the tariff speech has already inflicted immoderate damage. He and different concern leaders accidental that implicit the past twelvemonth they’ve watched concern dip successful Ciudad Juárez due to the fact that of governmental uncertainty, arsenic investors hesitate to funnel their wealth into businesses that could illness with the changeable of a pen successful Washington.

While Trump’s predetermination has been the superior operator of that uncertainty, June elections successful Mexico and a controversial judicial reform carried retired by Mexico’s governing enactment person added to it. Sotelo said helium saw a 7% driblet successful concern past year, and lone expects that to proceed until lingering tariff threats are resolved.

One corporate of maquiladoras successful the metropolis says it has seen astatine slightest 3 factories halt production.

“Every clip we perceive this sermon from governmental leaders, the radical moving our governments, it sends daze waves done the border,” Salayandia said. “Because the borderline is simply a planetary thermometer. Our products spell each implicit the world. Those companies volition spell look successful different parts of the satellite wherever they connection conditions to support competing.”

Associated Press writer Fernanda Pesce contributed to this report.

Originally Published: February 6, 2025 astatine 1:40 PM EST