In a medium saucepan over medium heat, add the butter. Once melted, add the diced jalapeño and Roma tomato. Cook for 3–5 minutes, stirring occasionally, until the jalapeño and tomato have softened.
Pour in ¾ cup of whole milk and stir to combine. You can add more milk later depending on how thick you prefer your cheese sauce.
Once the milk has heated through, add the garlic powder, cumin, and red pepper flakes, if desired. Stir to combine.
Reduce the heat to low and add the slices of white American cheese. Stir continuously until the cheese has completely melted and the sauce is smooth. Do not allow the cheese to sit on the bottom of the pan, as it can scorch or burn.
Once the cheese has fully melted, add the Hatch green chiles and stir until evenly distributed throughout the sauce.
Check the consistency of the cheese sauce. If you prefer a thinner sauce, gradually add the remaining milk until you reach your desired consistency.
Serve hot with your favorite tortilla chips. Leftover queso can be reheated over low heat, stirring frequently.
