Trump’s Tariffs Alarm Maquila Industry in Mexico

Trump’s Tariffs Alarm Mexican Maquila
Mexican Authorities Respond
Here Are the Details

The maquila industry in Ciudad Juárez, one of Mexico’s primary production and assembly hubs, is on high alert following threats of massive tariffs from U.S. President-elect Donald Trump.

Local business leaders estimate that the city has lost approximately 40,000 jobs and more than 250 companies this year alone, primarily in maquila, trade, and service sectors.

Uncertainty has grown since Trump announced key figures for his cabinet, including Robert Lighthizer, who served as U.S. Trade Representative (USTR) during Trump’s first presidency.

Regional business leaders have expressed concerns about the «aggressive» and «radical» policies Trump might implement in his second term, especially regarding trade and borders.

Trump’s Tariffs Alarm Mexican Maquila Industry

Donald #Trump threatens 25% tariffs on #Mexico if it doesn’t combat cartels. This could increase the cost of products like Mexico-made cars and hurt both economies. Is this protectionist policy self-defeating? #TrumpPolitics #MexicoUSARelations https://t.co/fyAgGR95Kt pic.twitter.com/80RiygpUl0

— Brasil Acosta Peña (@DrBrasilAcosta) November 18, 2024

«The profiles we’ve seen are very secretive, aggressive, radical, and in line with Trump’s rhetoric about closing borders and focusing inward,» said Thor Salayandía, president of the Border Business Block, in an interview with EFE.

The region heavily depends on the maquila industry.

Which has seen a significant economic decline.

This has manifested in both job losses and the departure of businesses.

The Impact of Tariffs and Economic Instability

Trump’s campaign was marked by threats to impose high tariffs on Mexican imports, close the border, and tax cars manufactured in Mexico.

While not all companies could relocate as Trump promises, local business leaders warn that additional tariff costs could force many companies to reduce profit margins, cut staff, or even lower production.

«Not all companies can relocate, but shrinking profit margins will lead to staff cuts or production drops,» Salayandía explained.

In Ciudad Juárez, many small and medium-sized businesses depend directly on the maquila industry for their livelihood, and a negative impact on this sector could trigger a ripple effect, affecting jobs and investment.

Mexico’s Authorities Respond and the T-MEC Threat

Despite the uncertainty, Mexico City’s head of government, Claudia Sheinbaum, expressed optimism about the effects of the review of the United States-Mexico-Canada Agreement (T-MEC), scheduled for 2026.

«Mexicans have nothing to worry about,» she assured, adding that the Mexican government will focus on demonstrating the treaty’s benefits not only for Mexico but also for the U.S. economy.

However, border economist Alejandro Sandoval Murillo warned that a potential cancellation of the T-MEC would have devastating effects on cities like Juárez.

«Canceling the treaty would virtually end economic activity in our region,» he noted.

Sandoval Murillo also pointed out that while Mexico’s economy has diversified in recent years, Ciudad Juárez’s geographic location remains crucial, as the city depends heavily on access to the U.S. market.

Future Prospects for the Mexican Maquila Industry

The outlook for Ciudad Juárez remains uncertain. While some business leaders hope Trump’s policies will moderate or face judicial challenges, others are already taking preventive measures in case the situation worsens.

The maquila industry, historically a key economic driver in the region, could face severe disruptions if Trump’s tariff policies are enacted.

This would not only impact jobs in the city but also threaten the economic stability of one of Mexico’s most dynamic regions.

As Trump’s threats begin to materialize and uncertainty persists, authorities and business leaders in northern Mexico fear that escalating trade tensions could have even deeper effects on the local economy.

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