Border cities in limbo as tariff threats spark fears of recession

CIUDAD JUÁREZ (AP):

As soon as the sun glints over miles of border fence dividing the United States and Mexico, the engines of cargo trucks packed with auto and computer parts roar to life along border bridges and bleary-eyed workers file into factories to assemble a multitude of products geared toward the US market.

For more than half a century, this daily rhythm has helped fuel the heartbeat of a transnational machine that generated more than $800 billion in trade between the US and Mexico in 2024 alone.

Over the past year, however, President Donald Trump’s threatened 25 per cent tariffs against Mexico and Canada have plunged manufacturing hubs all along the northern Mexican border into limbo, a state that persists despite a one-month reprieve to which Trump agreed on Monday.

Tariffs would cripple Mexican border economies that are reliant on factories churning out products for the US – auto parts, medical supplies, computer components, myriad electronics – and likely thrust the country into a recession, economic forecasters have warned. Some workers wonder how much longer they’ll have jobs, while business leaders say the uncertainty has already led many investors to start tightening their purse strings.

“It’s a conflict between governments and we’re the ones most affected,” said 58-year-old truck driver Carlos Ponce, leaning against his rig at the customs border crossing between Ciudad Juárez and El Paso, Texas. “Tomorrow, who knows what will happen?”

Ponce, who was driving a truck full of car shock absorbers, said he’s spent the past 35 years moving goods across the border, just as his father did before him. Now, he’s unsure how much longer that will last.

Manufacturing in export-oriented assembly plants known as maquiladoras are the heart of Ciudad Juárez’s economy, with 97 per cent of its goods going to the US, according to figures from Mexico’s Economic Ministry.

The factories were born in the 1960s in an attempt to boost economic development in northern Mexico and lower prices for US consumers. The maquiladora programme later took off after the North American Free Trade Agreement was signed in 1994. The agreement was supplanted by a similar pact, the United States-Mexico-Canada Agreement negotiated between the three countries during Trump’s first term.

Today, neon signs with the dollar-to-peso exchange rate flash across the city, a reminder of the close ties binding both sides of the border.

“Everything that happens in the United States: its economic, social policy … directly affects us because companies here in Mexico depend on what they sell in the United States,” said Thor Salayandia, head of his family’s auto-parts manufacturing facility in Ciudad Juárez. “The United States also needs Mexico to keep manufacturing, but they’re not seeing things like that.”