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🌊 Roca Reports from the Border
President Trump will pause tariffs if Mexico cracks down on migrants
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Sunland Park, New Mexico
Every ten minutes or so, a train winds its way along the mountain that divides the United States from Mexico. Many are taking parts and raw materials to Juarez’s maquiladoras. The president and his supporters say they’re taking American jobs with them; his critics say they create them.
Roca co-founder Max Frost in front of the US-Mexico border. The wall ends where the mountain begins
In 1965, the US terminated a program that let residents of Mexico’s impoverished border regions work seasonally on American farms. Just before the program’s end, it employed 177,000 Mexicans who sent some $40M back annually to Mexico. When the program ended, Mexico’s government needed to generate jobs and money near the border. To do so, it launched the Border Industrialization Program (BIP).
The BIP let companies import materials within 12 miles of the Mexican border without facing taxes or regulations. In effect, American companies could ship materials to Mexican border cities, assemble products there, then sell them in America. At the time, Mexican wages were roughly 20% of those in the US. They may be even cheaper today.
Within five years, the number of factories in northern Mexico increased by almost 20 times. The number of people employed within them rose by nearly 100x.
The system has since boomed, particularly after the introduction of the North American Free Trade Agreement (NAFTA) in 1994. By 2020, there were an estimated 300 tax-free border factories – maquiladoras – in Juarez alone, employing some 300,000 people. A third of the factories are in the automotive industry; others produce everything from electronics and clothing to medical devices.
On Saturday, President Trump announced 25% tariffs on all goods imported from Mexico. The maquiladoras faced an existential threat.
As the train exits the US and carries its raw materials into Mexico, a mountain comes into view: Mt. Cristo Rey.
When the train passes, you can see migrants running down the mountain, over the tracks, and into the US.
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Editor’s Note
This is the first of our multi-part series of on-the-ground reports about tariffs, trade, immigration, and the communities they impact. Our goal is not to say whether the policies are good or bad, but simply to help you understand them so you can make up your own mind. We’ll be back with the next installment soon.
Thanks for reading –
Max and Max
RocaNews co-founders