The March 4th deadline for 25% tariffs imposed on goods imported from Mexico and Canada are looming above Border Communities. According to the Center for Border Economic Development, the Santa Teresa port of entry in Southern Doña Ana County grew 14.8% year over year between 2021 and 2022. But the threat of tariffs has brought uncertainty to the region, according to Jerry Pacheco, president of the Border Industrial Association.
“Companies that use steel are making a run at steel right now. They were trying to purchase as much steel before the tariffs were implemented.”
Pacheco said in a conversation he had with a manufacturer in Santa Teresa, it was clear that the tariffs are already having a major effect on business.
“It got so bad for this company that its steel suppliers even stopped quoting them prices, because they were not sure whether they could satisfy all the demand here of companies being preemptive [trying to] buy steel. For the first time in this plant's history, the general manager was not able to buy steel for his operation last week. And that's a small example of the chaos that's been created by these tariffs. And it's going to affect all of us, you and me, the consumer ultimately will pay.”
Pacheco said that implementing such large tariffs would be devastating for the local economy. KRWG reached out to over a dozen manufacturers in the Santa Teresa area, and our calls went either unanswered or denied interviews outright.
According to a 2023 report from The Center for Border Economic Development, economic activity at the Santa Teresa Port of Entry and industrial parks produced over 4,000 direct jobs, with $2.5 billion in direct economic output. Pacheco said that 25% tariffs across the board would be a major roadblock for continued growth.
“The tariffs would create a threat to unravel that momentum, and the USMCA would also, on a larger level, be in danger, because here we are with a trade agreement to lower tariffs and facilitate trade, and yet we spark a trade war all in which all of a sudden we’re shooting tariffs at each other, and nobody wins.”
Dr. Christopher Erickson directs the Center of Border Economic Development at NMSU, and said that border related trade is the third largest creator of jobs in the county behind White Sands Missile Range and NMSU. Without tariffs, Dr. Erickson projects that within five years, Santa Teresa may become the largest source of jobs in the region, but that’s now in jeopardy.
“You have to remember that tariffs are taxes, they are a restriction on free markets. And if you’re someone who believes in free markets like me, then you should be opposed to tariffs, because they just hamper international trade, which is mutually beneficial to both the people who are on the buying side and people who are on the selling side,” Erickson said. “In the short run, it probably will mean a recession for the county. And in the long run, those jobs might be replaced by reshoring, but they won't be the engine of growth that it would be without tariffs.”
The impact of tariffs goes beyond the port of entry. Jon Barela is the CEO of The Borderplex Alliance, an independent economic development and policy advocacy organization. Barela said that the uncertainty of looming tariffs is creating a pause in projects in both New Mexico and El Paso.
“This threat and even the imposition of tariffs on steel and aluminum really upset the spirit and violate the actual letter of the law of the USMCA. So it's starting to create doubts with allies, including Mexico and Canada, whether the United States is a reliable trade partner. So we have to address that in the short term and in the longer term. But we are now upsetting a very, very crucial supply chain with these threats. And it creates uncertainty. And uncertainty is the enemy of investment.”
Barela said that building alliances is essential to staying competitive as one of the world’s economic superpowers, and said that a 25% tariff would be crippling for the region.
“The world economy is incredibly competitive, and we need friends and allies. We need trading partners to offset the pacing challenge that we are seeing with China, not only economically but militarily,” Barela said. “Las Cruces, Ciudad Juarez and El Paso are one integrated region economically, historically and culturally. We all thrive when one thrives, and when one is failing, we all feel the ripple effects when one area fails.”
As economic uncertainty looms, business leaders and economists warn that the current tactics of the Trump administration could stifle years of growth in the region. With jobs, investments and international relations on the line, hope remains of sustained economic momentum, while the future of international trade hangs in the balance.
