EL PASO, Texas (KTSM) - President-elect Donald Trump said in a campaign rally in North Carolina he would impose a 25% tariff on all Mexican imports if Mexico’s new leadership fails to address border security issues. “If they don’t stop this onslaught of criminals and drugs coming into our country, I’m going to immediately impose a 25% tariff on everything they send into the United States," Trump said, as reported by the New York Post. This sweeping proposal targets a wide range of products, significantly expanding beyond the specific steel and aluminum tariffs imposed by the Biden administration. UTEP Economics Professor Tom Fullerton said, while President Biden’s tariffs were aimed at protecting U.S. industries from unfair competition in specific sectors like steel and aluminum, Trump’s plan threatens tariffs across all goods from Mexico. This could have major implications for border cities like El Paso, which rely heavily on trade with Mexico. Fullerton said that these broad tariffs could increase prices for consumers and drive inflation. He outlined three main reasons why tariffs can cause inflation: they raise costs for businesses, reduce competition by making foreign goods more expensive, and increase production costs for U.S. manufacturers who rely on imported raw materials and components. “In El Paso, the biggest damages caused by these tariffs are going to be in the areas of warehousing, customs brokerage, manufacturing, and financial services,” Fullerton said. “It’s not just about consumer products; it will affect intermediate inputs, parts, and equipment used at various stages of production." Fullerton said that warehouses and logistics firms in El Paso would likely feel the impact first, given their role in handling cross-border trade. He also pointed out that part of the Trump Administration’s motivation may be tied to the increase in Chinese investments in Mexico, with many goods ultimately entering the U.S. market from there. Both the Biden and Trump administrations have expressed concerns that these investments could be a strategy for China to sidestep U.S. trade policies. As Trump prepares to take office, economists and policymakers are closely watching how these tariff proposals might unfold in the administration’s first 100 days. Fullerton explained that historically, similar wide-reaching tariffs, such as those during the 1930s, worsened economic downturns and increased unemployment rates. Analysts warn that new tariffs could lead to "stagflation" — a combination of stagnant growth and high inflation — and provoke retaliatory measures from Mexico. For now, the future of U.S.-Mexico trade relations remains uncertain, and the potential for economic disruption looms large, especially in border communities like El Paso that depend heavily on cross-border commerce.