U.S. border businesses feeling pain of fewer shoppers from Mexico and tariff threats

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El Paso Street buzzes by 9 a.m. on a weekday.

A shop owner with a front-row view of the Paso del Norte Bridge picks up a bedazzled pump and sets it on a box containing the mate. A jackhammer pulses two stores down, caution tape forcing walkers to the street. A steady stream of feet — some quick-paced, others leisurely — move past a Customs and Border Protection officer watching the scene unfold.

Life moves, but not at the pace it once did.

“Business is a lot slower now,” said Angel Macías, an employee at a business on the strip, where Spanish-language music is a soundtrack. “People from Mexico, like I have some friends over there who don’t want to cross anymore. They say it’s pointless … we did used to get a lot of customers that crossed over from Mexico. They don’t want to cross over anymore because of the lines.”

Hundreds of CBP officers who normally process people walking and driving into the United States have been diverted in recent months to the care and processing of migrants who have been taken into custody at the border. That has led to longer lines for people walking or driving into El Paso.

The El Paso/Ciudad Juárez ports of entry saw $72 billion in trade in 2015, according to the Texas Comptroller’s Office. Talk of tariffs, potential shutdowns, and slower lines is making border business owners nervous about the future.

“It’s drastically impacted the business, not only in downtown. Of course I think downtown is the biggest impacted, but of course this is everywhere in El Paso,” said Gustavo Tavera, owner of Tee Box on El Paso Street.

Business not as usual

Tavera has been in business for 29 years in one place or another along El Paso Street. His inventory is a mix or primary-colored polo shirts, neon tights, and basic t-shirts.

A few years ago, he had 11 employees. Today, he has four. He said he owes his suppliers money, struggles to make his car payment and worries that the business that put his kids through college may go bust.

“I’ve been adjusting the business for so long already … we have not many choices anymore. How many times can you lower the price on a shirt? You have four workers, you only give them 20 hours a week of work now,” said Tavera.

The problem, he said, starts in Central America. Since October  2018, the number of migrants moving through Mexico with sights set on the United States has increased.

“Nothing’s getting better,” he said. “From here to Christmas, we’re expecting another half a million people at least.”

The influx has meant customs agents are spread thin, increasing wait times to walk or drive onto El Paso Street, he said. People once making trips into the United States four times a week are now only coming once. When there’s hope among business owners to see more customers, such as upcoming school breaks that historically would bring more foot traffic from Juárez, it is shattered by reality.

Sergio González, owner of La Esquina at the corner of El Paso Street and Father Rahm Avenue, estimates a 15% loss of sales for the last 18 months. His store offers a variety of products, from self-care items to novelty character lunch boxes to live Betta fish.

Clothing businesses are down 40%, González said. Businesses are closing down.

“We’re friends,” Tavera said of other business owners in the area. “Every morning it’s the same thing. ‘How are you, how are you doing, how was yesterday.’ The answers? They’re always the same. ‘Oh bad.’ How was it Saturday? ‘Oh bad.’”

Early rise for cross-border employment

Macías wakes up between 4 and 5 a.m. to start his journey to work, less than a mile into Texas, just to make sure he’s on time. His queue time for entry to the United States was, until recently, on average 30 minutes. In early June, he waited more than an hour to be admitted.

“I’ve been crossing over for about four years,” he said. “The lines started a month, a month and a half ago … You get used to it. I got used to it. It’s like normal now.”

Macías is a U.S. citizen. His wife is a Mexican national. The couple has two daughters.

To make it to work on time, he’s up early. His commute includes a 45 minute bus ride from his home in Juárez. Leisurely trips to El Paso no longer exist.

“I know people that just want to come over and eat at McDonald’s, Burger King, there’s a Kentucky Fried Chicken,” he said. “There’s people who just want to come over and eat and go back, but they can’t do that because it’s about two to three hours to cross.”

Their money, Macías said, is being spent in Mexico instead. A shift in spending brings fear among employees in downtown, many who cross the border for the better wages.

“We are afraid because we work out of the stores downtown and, like, if the stores close, we’re going to have to move even further looking for jobs. So we hope for the best, but it’s going down as far as I see it. It’s decreasing on sales. It’s going from worse to worse.”

Working longer for just as much

On the corner of the Sixth and El Paso streets, a group of men patiently await customers coming from Mexico. They try to stay away from the sun of the summer standing in the narrow strip of shade provided by a wall.

This used to be a very busy spot in downtown, with taxi drivers going back and forth from El Paso to Ciudad Juárez and with many people crossing from Mexico to shop in El Paso. But now, taxi drivers are having a hard time to get enough clients and most of them have to work longer hours to make at least $60 or $80 per day.

“You have to work all day for that,” said Martín Ramírez, who has been a taxi driver for 30 years. “It was better before because the line would keep moving faster, but now with this, we have to stay longer hours to make three to four trips a day.”

He avoids taking trips to Juárez too.

“Whenever you get a trip to go to Juárez to the airport or to the bus station, on the way back it takes about three hours, if not about four hours to come back because they don’t have enough immigration agents to check all the cars; they just have two lanes open,” he says.

But occasionally, the long waiting lines benefit the drivers.

“Sometimes people coming are late to work, so they have to take a cab, but not always,” he adds.

Like the other taxi drivers in this corner, Ramírez works from Monday to Saturday, if not Sundays too. “It is not easy,” he says. “You got to work a lot of hours. It is getting bad.”  

Beyond the border

Trade at the El Paso ports of entry is down 7.3%, impacting both imports and exports, according to a May 2019 report from the Federal Reserve Bank of Dallas. Imports were down 9.8% to $45.3 billion.

The Fed cited “recent long delays at the border crossing due to Customs and Border Protection officers being diverted to process migrants.”

What starts at the border, makes its way into the city, state and country, creating ripple effects.

“Eighty percent of our freight comes all the way from Mexico and the interior of the republic and the other 20 percent is what we call domestic, either from El Paso or somewhere into El Paso or something just inside the United States,” said Angel Ponce, senior sales manager at Erives Enterprises Inc. in El Paso. 

The day at Erives starts with the sound of diesel engines revving to life. Border struggles put the company’s fleet of 210 trucks, and the jobs attached to those rigs, on the line. Lower import numbers slow down business.

“We’re talking about drivers who are making a paycheck every week,” said Ponce. “So when tariffs hit or the market slows down, some of those drivers have to stay home. We’re talking about drivers not having a week of payment. Not a lot of us can go through that.”

The past couple weeks, particularly, have been hard, said Ponce. The fleet is operating at 85 to 90% efficiency. Below 80 is cause for concern, which could result in a red line at the end of the month. No business wants to bleed money, said Ponce.

“We have a social responsibility to be successful, to be profitable for employees and for investors and the people that depend on us, including our customers and our stakeholders,” said Ponce.

Slowdowns to entry into the United States mean Erives has gone as far as hiring security to protect cargo overnight.

It’s more than just tariffs and slowdowns, though. Another Trumped-discussed threat looms with the potential replacement or change of the North American Free Trade Agreement.

“We have learned the last couple years that trying to predict what’s going to happen is a fool’s errand,” said Ponce. “The worst case scenario is for NAFTA to go away. I can tell you first hand that if NAFTA goes away, a lot of businesses are going to go away.”

This multimedia story was produced for 2019 Dow Jones Multimedia Training Academy by Tara Cuslidge-Staiano, Lourdes Cardenas and Steve J. Collins

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