NOGALES, Mexico -- A war raging between the Mexican government and drug lords is hurting American businesses that you rely on every day.

More than 130 people, mostly drug smugglers, have died south of Arizona in the past year.

In October, the Sonoran state police chief was assassinated in Nogales. As a result, storefronts are closing, tourists are scarce and life for merchants has gone from difficult to near impossible.

Julio Antonio makes a meager living by getting the attention of American tourists. He takes pictures of them with his donkey and sells trinkets like jewelry, sunglasses and hats.

But lately, Antonio has mostly been standing on a street corner. The constant flow of tourists to this border city has all but dried up.

"It is one of the worst seasons for us," Antonio said.

Shoppers have all but disappeared.

"To tell you the truth, last Christmas I had no presents for my family," said Alejandro Garza. "Why? Because I live out of the tourists."

Some blame the U.S. economy, but others say it's the drug war that's scared the tourists away.

It's not just a problem for the Mexican businesses on the south side of the border. The drug violence is also a problem for American businesses on the north side of the border.

Ciruli Brothers Produce imports fruits and vegetables from Mexican farmers. From squash to cucumbers, tomatoes to bell peppers, 90 percent of the produce West Coast consumers eat during the winter comes from Mexico.

"Whether it's Safeway, AM-PM, Kroeger, Wal-Mart, they all handle Mexican produce," said Charles Ciruli.

Ciruli said it now takes his trucks twice as long to get from the fields in Sinaloa to his air-conditioned warehouse in Nogales, Ariz., because of the government checkpoints they need to cross.

"It takes much more time," he said. "It costs money. The produce isn't as fresh as it could be so it's a very serious problem."

Back in Mexico, merchants are eager to point out that no tourist has ever been injured or killed here as a result of drug violence.

"It's true there are bad Mexicans," Garza said. "But 99 percent of the ones you see here are good respectable people."

But many businesses said if the tourists don't start coming back soon, the merchants of Nogales may be the next casualties of the drug war.