Trump’s Trade War Deepens Crisis in Ciudad Juarez’s Manufacturing Sector

For more than a decade, Fabiola Galicia steadily worked her way up the ranks at a ribbon manufacturing plant in Ciudad Juarez, just across the U.S. border from El Paso, Texas. Beginning as a production line worker, she eventually rose to manager, overseeing a team of 30 employees.

But by June this year, her workweek had been reduced to just three days. In August, Design Group Americas — the U.S. parent company that had filed for bankruptcy protection — shut down its Juarez facility, leaving Galicia and roughly 300 other employees without jobs.

Court filings and company representatives partly attributed the closure to tariffs imposed by U.S. President Donald Trump. “They told us the tariffs had affected the company,” Galicia recalled. Her husband, also employed at the factory, was laid off at the same time.

Design Group Americas did not respond to requests for comment on the layoffs.

The situation reflects a wider crisis across Juarez’s maquiladoras — assembly plants that import raw materials, largely duty-free, and export finished products to the U.S. For decades, these factories have been the backbone of Juarez’s economy, providing around 60 percent of local employment and drawing multinational firms seeking to avoid U.S. tariffs on Chinese goods through “nearshoring.”

Yet, after years of rapid expansion, the industry is now contracting. Between June 2023 and June 2025, Juarez lost more than 64,000 factory jobs, including nearly 14,000 in the first half of 2025, according to Mexico’s National Institute of Statistics and Geography. Mexico’s projected GDP growth for 2025 has slowed to below one percent, as businesses grapple with tariffs, rising labor costs, and political uncertainty.

“The industry is in crisis,” said María Teresa Delgado, vice president of the maquila association INDEX Juarez. While tariffs were the final blow, she and other business leaders pointed to multiple challenges: federally mandated wage hikes, shrinking profit margins, and weakened investor confidence following a controversial judicial reform that replaced appointed judges with elected ones — raising concerns about judicial independence.

The minimum wage in Mexico’s northern border region has more than doubled since 2019, from 22 pesos ($1.17) per hour to 52.48 pesos ($2.80). Meanwhile, Trump’s tariffs have hit key sectors such as steel, aluminum, automotive parts, and certain textiles. “Trump’s tariffs were the cherry on top,” Delgado remarked.

Foreign direct investment in Mexico fell 21 percent in the first quarter of 2025 compared to the previous year. In Chihuahua, where Juarez is located, manufacturing investment plummeted 56 percent, from $800 million to $348 million.

“Uncertainty is weighing heavily on the business environment,” said Ulises Alejandro Fernández, Chihuahua’s Secretary of Innovation and Economic Development. “Companies are delaying investments until there is clarity on trade policy.”

The uncertainty is already driving companies away. Earlier this year, Lear Corp announced it would move some automotive production from Juarez to Honduras to offset rising costs. French electronics firm Lacroix also plans to shutter its Juarez operations by year’s end, citing trade instability and sustained financial losses.

Local businesses are also struggling. Thor Salayandia, president of the regional business coalition Border Block Trade, said his hardware factory, which once employed 90 workers, is now down to just 20. “Clients are cutting costs,” he said. “One day they place an order, the next day they don’t.”

For workers like Galicia, the fallout has been devastating. “I gave 11 years to that company,” she said, reflecting on her sudden job loss. “Now, we don’t know what comes next.”