Donald Trump’s self-described “beautiful” tariffs continue to dominate the news headlines. After announcing last week that he would immediately impose 25% tariffs on consumer goods from Canada and México, Trump “paused” the tariffs for 30 days after both Canada and México announced steps to help bolster border security. A few days ago, Trump announced that he would impose tariffs on steel.
Although Trump imposed a 10% tariff on Chinese goods, he nonetheless delayed the $800 loophole used by Chinese manufacturers to import clothing destined for online stores selling Chinese textiles to consumers. The excuse for the delay was “ostensibly for administrative reasons.”
According to Trump, “tariffs are very powerful, both economically and in getting everything else” he wants. The problem for Trump is America’s economy. Although arguing that the tariff is imposed on the manufacturer, he conceded recently that his tariffs could cause “some pain” to American consumers. According to a recent report by the Tax Foundation, the proposed tariffs for Canadian and Mexican imports would add a cost of around $800 in 2025 to the average US consumer.
Although the tariffs are mostly paused for now, the impact on El Paso’s economy must be examined to see what effect, if any, the proposed tariffs would have on the community, in addition to the rising costs of the consumables.
Tariffs are imposed on the products imported into the United States from other countries. Canada, China and México are America’s top three sources of imports for consumables, with México leading the pack. Because of El Paso’s location on the border, many of the imports transit through El Paso’s ports of entry.
According to data from the Bureau of Transportation Statistics, in the four years between 2019 and 2022, most of the trade between the United States and México crossed into the country on trucks. Trucks were followed by trains. Air, vessels and pipelines, together accounted for less than half of the cross-border trade occurring overland.
Most of the foreign overland trade enters via the Mexican border. Over the four-year period between 2019 and 2022, on average, Canada only accounted for 18% of the truck traffic entering the US. In 2022, the top three ports of entry for arriving imports were Laredo with $238 billion in freight, Detroit at $115 billion and the Ysleta-Zaragosa bridge accounted for $73 billion in imports. Between 2008 and 2019, El Paso consistently ranked second for all import freight traffic in Texas. However, in 2020, El Paso’s import truck traffic dropped behind Hidalgo to third place of all the ports of entry. Since 2021, commercial traffic through El Paso has lagged those from Hidalgo, Santa Teresa, Nogales and Calexico.
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A 2018 report by the Texas Comptroller of Public Accounts, states that Texas “accounted for nearly $740 billion in international trade” that year. El Paso accounted for 20.1% of the Texas trade with México. According to the Texas Comptroller, the trade “affected about 165,500 net jobs in Texas.” The top three imports from México in 2018 were electronics, machinery and vehicles, while the two top exports were electronics and machinery.
The fastest growing freight markets last year were the Laredo and the El Paso border crossings points, with the Ysleta-Zaragosa International Bridge accounting for $6.4 billion in trade.
A January 2024 TXDOT report titled “Freight, International Trade and Connectivity” states that “U.S. trade with Mexico is critical to the economic prosperity of the U.S. and Texas.” According to the TXDOT report, of the 633 planned roadway projects for Texas, $1.4 billion is available for funding 168 planned projects around El Paso and its surrounding areas. The TXDOT report adds that in 2022, approximately 76.9% of all US-México commercial traffic and railways handling imported goods were processed at one of the 13 Texas border crossing points equipped to handle imports.
The TXDOT report explains that imports handled at El Paso and Santa Teresa generated approximately 416,000 jobs in 2019.
Reimagine I-10
Since 2017, the Texas Department of Transportation has been holding public meetings for its Reimagine I-10 project. The project “is to analyze and evaluate the current and future transportation needs for the I-10 El Paso corridor.” The project seeks to address the issue of El Paso’s limited traffic routing problems in and out of the city.
Because El Paso has five ports of entry, the “importance of this [El Paso] corridor is far-reaching” because I-10 is “a major east/west freight corridor.” Additionally, according to the TXDOT report, “El Paso is experiencing significant growth and development.” The city’s Economic & International Development Department, concurs, adding that El Paso “is a top 20% U.S. performing economy and continues to experience economic growth.”
The Reimagine I-10 project has held three public meetings. The first was in the summer of 2017, followed by a second meeting in March 2018. The third meeting was held in January 2019.
In the first meeting, answering the question about whether the TXDOT project would expand the lanes on the highway, the department said that a decision would be made after the evaluation was completed. The accompanying fact sheet for the meeting stated that “Mexico is the top export market for El Paso.” The fact sheet added that goods exported from México in 2016 were worth $23 billion and that truck and rail traffic will increase by 50% this year.
The Proposed Deck Park
One of the local projects making headlines in El Paso is a proposed deck park over I-10 in the downtown area. The catalyst for the deck park is the Reimagine I-10 project.
It wasn’t until the second public meeting that public comment included adding a deck park to the TXDOT project. On March 7, 2018, an anonymous commenter suggested that “the redesign should” correct the cutoff of El Paso’s downtown caused by the 1960’s redesign by “looking at decking the area.” In the second of only two comments made regarding the deck park, Peter Svarzbein referenced the deck park in passing.
In his video comment, Peter Svarzbein, representing District 1 at the time, ended his comments about TXDOT’s project with “and as a last one, a lot of the people that I’ve spoken to, that are stakeholders in downtown whether they are property owners or investors or even just more folks that are just going to art shows, one thing I hear about is the deck park.” He concluded that TXDOT should “stich those two areas and create more of an opportunity for social spaces within downtown and the uptown area.”
Two meetings were held in January 2019. As of February 12, 2025, TXDOT has not posted the results of the meetings on its website.
The direct impact of international trade through El Paso is generally speculated as being significant but empirical data is difficult to find. Although Texas’ economy benefits by trade with México and the comptroller has suggested that over 100,000 Texas jobs are affected by the trade, there are no recent studies available about how many jobs are directly impacted in El Paso. However, it can be inferred that Mexican trade influences both the El Paso economy and its job market. The city’s budget provides more information about how trade with México impacts El Paso’s governing body.
The City of El Paso budget for 2025, which is the current budget, states that the El Paso city government is expected to spend $1.33 billion during this fiscal cycle. Among the several line items in the budget includes The International Bridge fund.
The International Bridge Fund
The International Bridge Fund has a budget of $30.3 million to manage the international bridges: Paso del Norte, Stanton-Lerdo and Ysleta-Zaragosa. One of the revenue line items for the City of El Paso are international bridge crossing fees.
Revenues from bridge crossing fees are expected to be around $26.7 million this year. However, the budget does not indicate how much of the budget line item is attributed to commercial cargo.
It should be noted that the city’s budget for international bridge fees shows that cargo, which is presumably foreign trade commodities, surpassed vehicle and pedestrian traffic in 2019 and has remained on top since then.
The bridge revenues are only a part of the fees the city generates from international trade. The airport, owned and operated by the city, also generates revenues for the city from commercial cargo. The city’s budget has a line item of just over $1 million for “cargo” landing fees. However, it is difficult to parse out how much of the fees from travelers can be attributed to trade with México. Likewise, the fees collected for business licenses that can be directly tied to international trade and their impact on secondary businesses like restaurants and public venues that benefit from business travelers are difficult to ascertain.
However, El Paso’s unemployment rate mirrors maquiladora manufacturing activity over the years.
Unemployment And Maquiladora Activity
The latest information available for maquiladora output is from 2016. By correlating this data against the Federal Reserve Bank of Dallas’ (Dallas Fed) data for El Paso’s unemployment rate and foreign trade it can observed that unemployment generally drops as maquiladora output and imports/exports increase.
During the 2020 pandemic crisis, unemployment in El Paso jumped to around 15% while imports dropped to around 50% from 80% the previous year. Maquiladora output reported a negative 20% growth.
After rebounding in 2022, maquiladora output growth has stagnated, dropping a few percentage points in 2024. However, imports and exports have steadily increased with imports reaching almost $100 billion last year. During that time, El Paso’s unemployment rate remained steady at around 4%. El Paso’s unemployment rate has steadily decreased since 2009, when it was around 7.5% to the current rate, excluding almost 16% from the pandemic.
Although a direct correlation between the proposed tariffs on México and their impact on El Pasoans is difficult to calculate because of the lack of empirical data, the relationship between unemployment rates against internation trade suggests that El Paso jobs will likely be affected negatively. The trickle effect of job losses will likely impact several sectors of the community.
The city’s nexus to international trade between America’s second largest partner suggests that tariffs, in addition to the higher cost of consumer goods, will lead to job losses and affect the city’s economy. The proposed deck park’s future will largely depend on the private sector’s ability to respond to the threat that the tariffs may have over the longer term. Without funding from the private sector for studies and lobbying the deck park is likely to stall as El Paso’s economy stagnates.
Government funding for the proposed deck park was difficult to secure before the threat of tariffs, suggesting that under the cloud of a trade war, funding for such a project would be untenable.
Tariffs are just one economic threat for El Paso’s economy under the Trump Administration. Cuts in federal funding will reverberate across several economic sectors in the city, including healthcare and government jobs.