Three takeaways from Sen. Ben Ray Luján's tariff roundtable

Uncertainty created by the pendulum swing of new tariffs from the Trump administration is inflating business expenses and encouraging companies to pause expansion plans, according to New Mexico business leaders. But the tariffs could encourage more manufacturing south of the U.S.-Mexico border and create an opportunity for new trade partnerships.

Democratic Sen. Ben Ray Luján gathered more than a dozen business leaders at the Hispano Chamber of Commerce on Tuesday to discuss the impact of new tariffs on New Mexico industries.

The big takeaway for the New Mexico senator was that uncertainty is negatively affecting businesses.

“What I heard today is that there’s no guidance being given to small businesses when there’s a major economic policy like these Trump tariffs, which we’re now seeing as a national sales tax with a negative imposition on people all across the United States,” Luján said.

Republicans argue the tariffs could create well-paying job opportunities.

The Trump administration tariffs are “strategically designed to encourage American investment” and protect New Mexico’s manufacturing and energy sectors, New Mexico GOP Chairwoman Amy Barela said in a statement.

Uncertainty damaging business

Business owners in New Mexico have been told there will be a tariff increase, but don’t know what the percentage will be, said Black Chamber of Commerce of New Mexico President Karla Causey.

Blanket 10% tariffs have been issued on every country but China, which has larger tariffs, and Canada and Mexico, which fall under a different trade agreement. But after 90 days, those blanket tariffs could increase to the tariffs originally announced by President Donald Trump or tariffs could be renegotiated to a different percentage. Some products are exempted from the tariffs.

Several companies that work in the Santa Teresa area near the U.S.-Mexico border have paused or canceled expansion plans because of the uncertainty created by the tariff policies, said Jerry Pacheco, executive director of the International Business Accelerator. Pacheco also writes a column, which the Albuquerque Journal runs.

The border region contributes about $2 billion to the New Mexico economy annually, he said.

“People are not hiring in the midst of New Mexico having the best year globally we’ve ever had in the 34 years I’ve been tracking exports,” Pacheco said. “2024 was the biggest year we’ve ever had, and our little state went from the 20th largest exporter to Mexico to number nine. .... And we stand to lose all that momentum because of this chaos and confusion that’s being caused by the administration.”

In the past, the trade community has been consulted ahead of major changes to federal trade policies, Pacheco said.

Uncertainty is also a major problem in the agriculture industry, said Jeff Witte, New Mexico Agriculture secretary. Not knowing the end game for Trump’s economic policies is aggravating, he said.

“When I talk to Olam and I talk to some of the folks that import chile products out of Mexico, they’re fine today, but nobody knows what tomorrow is,” Witte said.

Olam is a large agriculture business with an international footprint, and owns a chile company based in Deming.

A focus on supply chains

Some of the key concerns are the risk of high-tech production costs increasing, retail goods costs rising from the tariffs, and food and dairy costs increasing from retaliatory tariffs, said Leslie Hielema, president and CEO of the New Mexico Chamber of Commerce. Trade relations with Mexico could also be affected.

“We need to begin focusing on supply chain alternatives,” Hielema said.

New trade opportunities

Because of the tariffs, some industries will be more able to compete, according to Gerardo Fierro, executive director of the New Mexico Border Authority. The Ciudad Juárez Economic Development Department and the Mexican state of Chihuahua both see opportunity, he said, because businesses looking to leave Vietnam, China and Southeast Asia may relocate to Mexico. It could be an opportunity to work with the Mexican government and make new business partnerships that bring investment into New Mexico, he said.