The businesses that sit along the border between the United States and Mexico have gone through a full cycle of will-he-or-won’t-he when it comes to President Donald Trump’s tariffs over the last six weeks.
For three chaotic days in early March, manufacturers, distributors and customs agents in a desert industrial park near El Paso, Texas, bumbled their way through as goods entering the United States from Mexico were briefly hit with a 25% tariff. Manufacturers called logistics firms with questions that no one could answer. Warehouses across the border in Juárez, visible from the park, were stuffed with held-up inventory. Trump backtracked on that tax for most shipments from Mexico but imposed a 25% tariff on metals and cars. The businesses on the border breathed a sigh of relief when the administration left Mexico off the list of countries hit by “reciprocal” tariffs that were imposed — and then paused — Wednesday. But it was a reprieve only from the immediate turmoil, not an end to the border region’s unease.
“We dodged a big bullet with that one,” said Octavio Saavedra, the president of EP Logistics, a cross-border logistics firm with offices in El Paso and Juárez that handles shipments of electronics, including servers for data centers, and a variety of other imports. “But there’s still a very huge concern.”
One worry is the 25% tariff on foreign steel and aluminum that took effect last month. One of EP Logistics’ customers, a Mexican company that makes steel columns for buildings, sends its products to an American subsidiary before distributing them to sites across the United States. For the time being, the company is holding inventory in Mexico to avoid paying the tariff, Saavedra said. Another concern involves other imports from Mexico that are subject to a 25% tax. Trump at first disparaged, but then reaffirmed, the authority of the United States-Mexico-Canada Agreement, which he negotiated during his first term. That agreement allows for tariff-free trade across those countries’ borders, but only for products produced in North America or composed of parts that mostly originated in the region. All other goods are subject to a 25% tax. Saavedra said his company was taking extra steps to validate USMCA certificates to make sure companies met the requirements. Throughout the industrial border region, which includes Texas and New Mexico, there is fear that Trump will again change his mind.
“With President Trump, you never know from one day to the next,” said Daniel Manzanares, director of the Santa Teresa International Export and Import Livestock Crossing in New Mexico. This agricultural cooperative helps move cattle between the United States and Mexico. The tariff placed on Mexican goods in March momentarily prompted a sharp slowdown in crossings.
On Wednesday — a chaotic day when the United States imposed worldwide tariffs and China retaliated — Trump administration officials at one point indicated that Mexico and Canada would face an additional 10% tariff. Jerry Pacheco, the president of the Border Industrial Association, an advocacy group, was driving through the desert of New Mexico as he processed the news and the likely hit to companies operating in the area.
Then, later that afternoon, the White House clarified that tariffs on Mexico and Canada would remain unchanged.
“It’s a roller coaster,” Pacheco said. “You can’t operate industry, and businesses cannot operate, in this type of environment.”
In a region where trade with Mexico is valued at tens of billions of dollars annually, logistics companies and their customers are closely watching Trump’s rapidly shifting trade policies. At an industrial park in Santa Teresa, New Mexico, which is just across the state line from El Paso, 22,000 acres of land is dotted with distribution and manufacturing facilities for about 80 companies, almost all of which rely on cross-border shipments. Roughly two-thirds of the companies are American, Pacheco said.
“It’s a symbiotic relationship we have with Mexico,” he said. Driving between warehouses, he could point to the evidence: a truck carrying a blade for a wind turbine that was made in Mexico; a warehouse that holds computer components shipped from Asia for computers that will be manufactured in Mexico before being shipped back to the United States; a bagging and labeling facility for National Onion, an onion importer.
Private investors that build production plants and distribution centers are “spooked” by Trump’s tariffs, Pacheco said. Motioning to a newly built warehouse, he said he worried that tariff whiplash could keep that facility and others vacant.
U.S. companies and some European ones, especially those involved in medical device and car production, have started to pause investments at the border, said Jon Barela, the CEO of the Borderplex Alliance, a privately funded economic development organization for the binational region at the intersection of Texas, New Mexico and Mexico. They are waiting to see how the tariffs pan out, a trend that has intensified over the last six weeks, he said.
Lane Gaddy is the CEO of W. Silver Recycling, which specializes in metal recycling, with operations in the Santa Teresa industrial park. The tariff havoc that Gaddy experienced in March underscored his view that broad tariffs on imports from Mexico were not sustainable. He fielded call after call from customers — companies hoping to sell their excess metal materials — and saw firms race to move their scraps across the border. That influx has since tempered, he said.
“We could see the tea leaves,” Gaddy said, adding that he was not surprised that Trump had decided to keep the USMCA exemption. “You can’t put tariffs in place without truly shutting down the U.S. economy.”
This article originally appeared in The New York Times.
