‘A tax hike on working people’: New Mexico officials react to Trump’s latest tariffs

By Matthew Narvaiz and Justin Garcia

New Mexico officials slammed the sweeping tariffs announced Wednesday by President Donald Trump, including a 10% duty on imports from all countries and even larger retaliatory increases for many of the United States’ biggest trading partners.

Trump announced the latest tariffs, which include a 34% tax on imports from China and 20% on the European Union, during an hourlong speech at the White House Rose Garden. He touted the executive order as a way to regenerate a robust manufacturing sector not seen in the U.S. in decades and bring in hundreds of billions in new revenue to the federal government.

“Taxpayers have been ripped off for more than 50 years,” he said. “But it is not going to happen anymore.”

Global markets reacted poorly to the after-the-closing-bell announcement. On fears of a trade war, Dow futures were down more than 1,000 points, or nearly 3%, the S&P 500 futures dropped 3.6% and Nasdaq-100 futures lost 4.5%.

These are the largest tariffs Trump, who hailed Wednesday as “Liberation Day,” has yet to impose.

They come on top of recent announcements of 25% taxes on auto imports; other levies against China, Canada and Mexico; and expanded trade penalties on steel and aluminum. Trump has also imposed tariffs on countries that import oil from Venezuela, and he plans separate import taxes on pharmaceutical drugs, lumber, copper and computer chips.

Canada and Mexico would not face higher rates on what they’re already being charged by Trump in what he says is an effort to stop illegal immigration and drug smuggling. As of now, goods that comply with the United States-Mexico-Canada Agreement would be excluded from those tariffs.

Trump’s speech prompted sharp disapproval from New Mexico’s congressional delegation, including Democratic Rep. Gabe Vasquez, whose district largely covers southern New Mexico — a border area heavily linked to global trade networks.

“These tariffs are a tax hike on working people. They’ll continue to drive up the cost of food, kill jobs in our border communities and threaten the industries that keep rural New Mexico running,” Vasquez said, citing key industries like agriculture and cross-border commerce.

Sen. Ben Ray Luján, a Democrat, called the tariffs a tax — warning that New Mexicans may see increasing grocery and gas costs.

“While President Trump should be focused on lowering prices for Americans, he is instigating a trade war and making everyday Americans the casualties,” Luján said. “President Trump — who has said that he doesn’t care if costs go up — is creating economic uncertainty, shrinking life savings, putting New Mexico jobs at risk and driving up costs for working families.”

A recent analysis from the Yale Budget Lab projects households at the lowest end of the income spectrum could see disposable income drop more than 5%, assuming countries impose retaliatory tariffs on the U.S.

Trump’s tariffs are “a massive tax increase on New Mexicans, many of whom are already struggling to make ends meet,” said Gov. Michelle Lujan Grisham, also a Democrat, in a statement.

“These tariffs will make everything more expensive — from groceries and fuel to cars and building materials, electronics and more,” Lujan Grisham said.

An official with the Republican Party of New Mexico didn’t respond to a Journal request for comment.

The Trump announcement, however, drew praise from some Republican lawmakers and trade organizations, including the National Electrical Contractors Association and the Alliance for American Manufacturing, or AAM.

“Today’s trade action prioritizes domestic manufacturers and America’s workers. These hardworking men and women have seen unfair trade cut the ground from beneath their feet for decades,” AAM President Scott Paul said in a statement. “They deserve a fighting chance. Our workers can out-compete anyone in the world, but they need a level playing field to do it. This trade reset is a necessary step in the right direction.”

‘Playing games’

Medical devices from Mexican companies make up about 40% of all imports to New Mexico. But other key imports, from produce to electronics, cross the border daily.

Core industries like oil and gas, health care, housing and energy are likely to feel the pain, New Mexico State Treasurer Laura Montoya said in a Wednesday press call.

“Trump is playing games with people’s lives, and it’s a huge punch in the gut to all of those who have consistently carried this nation on their backs,” Montoya said, who spoke alongside state officials from Minnesota, Washington and Connecticut.

Christopher Erickson, an economics professor at New Mexico State University who focuses on border trade, said there has been a “tremendous increase in trade” over the last year between Mexico and the U.S., in part spurred on by ports of entry like Santa Teresa, which accounts for more than $27 billion worth of trade.

But imposing tariffs on Mexico, the state’s largest trading partner, could affect the production and transportation of turbine blades for windmills, he said. Mexican companies produce those blades and store them in Las Cruces before they’re “shipped all over the country,” Erickson said.

“That kind of trade will be disrupted,” Erickson said. “Whether it will eliminate that trade altogether or not, I’m not sure, but it will definitely make … those companies that are in Mexico and in Las Cruces less competitive.”

While there are potential upsides to Trump’s sweeping tariffs, like incentivizing the onshoring of manufacturing jobs, he added, that doesn’t mean much for a state like New Mexico in the short term, where the manufacturing base is not a large contributor to the local economy.

A recent labor report from the New Mexico Department of Workforce Solutions said some 29,000 people were working in manufacturing roles in February.

“Generally, we will benefit less from tariffs in terms of creating jobs than other parts of the country, just because we don’t have the manufacturing base. We don’t have the manufacturers who could potentially expand in response to the higher market demand,” Erickson said.

But in the long term?

“It may mean that our manufacturing base will expand and we will attract new manufacturers, or new manufacturers will open up in our state. That’s certainly a possibility, and so we would likely see some expansion in our manufacturing sector because of the tariffs.”

The Associated Press contributed to this report.