Trump Tariffs and Local Challenges Hit Ciudad Juarez Manufacturing Sector

Fabiola Galicia, who worked for 11 years at a decorative ribbon factory in Ciudad Juarez, saw her hours cut to just three days a week in June.

In August, Design Group Americas – which filed for bankruptcy protection last month – closed its Ciudad Juarez factory, leaving Galicia and around 300 other employees without work.

Court filings indicate the company partially blamed U.S. President Donald Trump’s tariffs for its difficulties. Galicia said a company representative explicitly cited the tariffs: “They told us the tariffs had affected the company.”

Assembly plants in Ciudad Juarez, which import raw materials mostly duty-free and export finished products to the U.S., are now in crisis. President Trump’s global trade war has compounded challenges already facing the sector, including rising wages and investor concerns over reforms by Mexico’s ruling leftist Morena party.

These plants, known as maquiladoras, account for roughly 60 per cent of jobs in Ciudad Juarez. The city became a major manufacturing hub as multinational companies relocated operations there to avoid U.S. tariffs on Chinese goods. But after years of growth, many factories are now laying off staff or closing entirely.

According to Mexico’s National Institute of Statistics and Geography, between June 2023 and June 2025, Ciudad Juarez lost more than 64,000 factory jobs, including nearly 14,000 in the first six months of this year alone.

Maria Teresa Delgado, vice-president of the maquila association INDEX Juarez, described the industry as “in crisis.” She cited a combination of factors behind the layoffs, including Trump’s tariffs, rising minimum wages, and investor concerns. In northern Mexico, the minimum wage has increased from 22 pesos ($1.17) per hour in 2019 to 52.48 pesos ($2.80) today.

Delgado called the tariffs “the cherry on top” of the mounting pressures facing factories.

Foreign direct investment in Mexico fell 21 per cent in the first quarter of 2025 compared with the previous year. In Chihuahua state, where Ciudad Juarez is located, investment in manufacturing dropped 56 per cent, from $800 million to $348 million.

Some companies are already leaving Ciudad Juarez, relocating to countries with lower labour costs or investing in the U.S. to avoid tariffs. Earlier this year, automotive parts manufacturer Lear Corp announced it would move some production lines to Honduras. French electronics maker Lacroix plans to close its Ciudad Juarez operations by the end of the year.

Thor Salayandia, president of the regional business coalition Border Block Trade, said he had to cut staff at his nail factory in Ciudad Juarez, reducing employees from around 90 in 2023 to just 20. “Clients are cutting costs. One day they place an order, the next they don’t,” he said.

Copied