Border Factories Shed 17,000 Jobs as Trade Wars and Mexican Policies Squeeze Industry

The industrial corridor along Mexico’s northern border is grappling with significant economic disruption as trade policies from both the United States and Mexico reshape the manufacturing landscape that has long been the backbone of the region’s economy.

José Luis Contreras Hernández, president of the Mesa de Otay Industrial Association, said commercial activity has contracted sharply due to tariff policies implemented by the Trump administration, with exports falling an average of 7 to 8 percent, and at times dropping as much as 30 percent.

“The uncertainty that has been left in the market is what has had the most impact,” Contreras said in an interview. He noted that the negative effects began even before President Trump took office in January, as campaign promises about trade policy changes created market volatility.

“I would say we have seven months of this because even before he took office, he was already announcing this commercial break and changing the new world economic order,” he said.

The disruption has forced manufacturers to implement survival strategies. Many companies have reduced work shifts — from three shifts to two, or from two shifts to one reduced shift. Firms with committed orders accelerated production schedules before tariffs took effect and began stockpiling products on the U.S. side of the border. Automation has also intensified as companies seek to reduce labor costs.

Contreras estimated that approximately 17,000 workers have lost their jobs in Baja California, though he clarified that this figure stems not solely from tariff policies but also from increased automation — a trend accelerated by Mexico’s labor reform that has made workers more expensive.

“To the extent that labor becomes more expensive, industrialists will seek to automate their processes more,” he explained, adding that this phenomenon is spreading throughout the border manufacturing sector.

Despite the challenging landscape, Contreras identified potential opportunities for Mexican industry. As high tariffs on Asian imports take effect, he said, Mexico could become the natural supplier to the United States.

“If imports are going to be reduced or eliminated due to high tariffs from Asia, we will be the natural supplier to the United States,” he said.

The business leader called for Mexico to develop a more autonomous growth strategy, emphasizing that policies from the Mexican federal government have also negatively impacted the export industry.

“We must seek our own growth path. Dependence makes us more sensitive to these variations in economic policy,” he warned.

According to Mexico’s Commerce Ministry, more than 80 percent of Mexican exports go to the U.S. market.

Contreras pointed to Mexico’s significant domestic market potential, with 50 million people living in poverty representing a substantial untapped market. However, he criticized the lack of federal public policies supporting this internal development.

Despite current challenges, Contreras expressed optimism about the future of the border industry, particularly in high-technology development and technological innovation.

“One of the great industrial spaces that will emerge here is high-technology industry, technological innovation,” he projected.

The border manufacturing region, which has served as a critical link in North American supply chains for decades, now faces the challenge of navigating an increasingly complex trade environment while seeking to maintain its competitive edge in the global economy.

“This article was produced with the assistance of artificial intelligence tools and edited by Tijuanapress.com editorial staff.”