Border towns feel the chill from Trump's tough talk on trade and immigration

A product of Mexico label on a box of vegetables at the Ciruli Brother's CCMV Warehouse in Nogales, AZ.
Jodi Gralnick | CNBC
A product of Mexico label on a box of vegetables at the Ciruli Brother's CCMV Warehouse in Nogales, AZ.

Nohe Garcia stands atop a hill in Nogales, Arizona, a sweeping vista of rugged terrain — and imagines what could be.

He bought 215 acres — the last parcels of land here to be zoned for light industrial development. Garcia leans over a rough map and traces the outlines for the road and how it will connect from the Mariposa Port of Entry in Nogales to Interstate 19, part of the international "Canamex corridor."

"So here what we envision is to build thirty 100,000-square-foot warehouses," he said, calculating quickly, "so the numbers are in the thousands of jobs." Garcia's already graded down a 40-acre lot, doing much of the work himself to save money.

A dual citizen of Mexico and America, with family on both sides of the border, he says President Donald Trump's talk of border taxes, doing away with the North America Free Trade Agreement (NAFTA), a massive border wall, and a crackdown on immigration is scaring Mexican investors.

"We had a couple of vegetable and fruit growers that wanted to establish here," he said. "There are Mexican investors here that own warehouses for distribution, but they have backed out and are waiting to see what happens."

Chris Ciruli, COO of Ciruli Brothers in Nogales, AZ.
Jodi Gralnick | CNBC
Chris Ciruli, COO of Ciruli Brothers in Nogales, AZ.

Within view of Garcia's would-be industrial park stands Ciruli Brothers' warehouse — a third-generation family business of produce distributors with facilities in Nogales and McCallen, Texas. Chris Ciruli, the chief operating officer, said, "It's incredibly important to us that this border stays open and flowing with product from Mexico to the U.S."

Fifty-four percent of all imported produce comes from Mexico and Nogales, the largest port of entry for those fresh fruits and vegetables. The last few years have seen record growth in volume and value, and business is booming. But the looming prospect of a border tax or tariff, regardless of its name, concerns Ciruli and other produce distributors.

"Increasing the cost of fresh fruits and vegetables and making people buy processed food, that doesn't help the American economy nor does it help the actual American people," he said.

U.S. Customs says $17 billion a year passes through the Nogales crossing. Raw materials, finished products, employees — even financing moves both ways.

Luis Fernando Parra, an attorney, specializing in cross-border commerce, says his clients are looking with a wary eye to Washington. "These companies are having second thoughts about building these warehouses, having second thoughts about employing folks here in the U.S. so that these warehouses can run efficiently, he said.

Parra believes NAFTA has been good for business, good for Nogales, and good for the United States, but he says, after more than two decades, the deal could use a tune up. He thinks Canada, Mexico, and the U.S. could renegotiate a deal that addresses more issues of employment, the environment, intellectual property, and digital technology. But he thinks the general tenor of the talk out of Washington is discouraging business growth.

Garcia agrees: "It is giving us a lot of uncertainty, and uncertainty and fear are the enemy of trade and trust."

When asked if he worries about his grand project, La Loma Grande Industrial Park, could be in jeopardy because of Washington policy, Garcia gives a small grimace.

"This is my dream. I came to Nogales, I think this is a great place to live. I went to school I established my business here, I am dreaming my American dream and they are killing it," he said.