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Trump’s plan to close US-Mexico border will have ‘devastating impact’ on economy

The president's threat to close the border over migration will cost the U.S. about $1 billion in trade daily.

Pedestrians walk towards the U.S.-Mexico border at the San Ysidro Port of Entry on March 29, 2019 in San Diego, California. President Donald Trump has threatened to close the United States border if Mexico does not stem the flow of illegal migrants trying to cross. CREDIT: Sandy Huffaker/Getty Images.
Pedestrians walk towards the U.S.-Mexico border at the San Ysidro Port of Entry on March 29, 2019 in San Diego, California. President Donald Trump has threatened to close the United States border if Mexico does not stem the flow of illegal migrants trying to cross. CREDIT: Sandy Huffaker/Getty Images.

With his efforts to secure $8 billion to build a U.S.-Mexico border wall hamstrung, President Donald Trump over the weekend renewed his threat to shut down the border altogether, potentially disrupting hundreds of billions of dollars in trade between the two countries.

“Mexico must use its very strong immigration laws to stop the many thousands of people trying to get into the USA,” Trump tweeted on Saturday. “Next step is to close the Border!”

As of now, there is no timeline for a potential border shutdown, but if it actually happens, the future of the not-yet-ratified free trade agreement between the United States, Canada, and Mexico will be uncertain. The USMCA is meant to facilitate trade of goods and services between the three countries — and the United States does a staggering amount of trade with Mexico.

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Shutting down the U.S. ports of entry means there would be no northward flow, said Christopher Wilson, deputy director of the Wilson Center’s Mexico Institute. It would mean “anyone who would be coming to the United States for travel, for work, or commerce — the movement of goods, with mostly trucks, but also trains — would be stopped.”

It’s unclear if the president will also try to block southbound flows, but, as Wilson pointed out, “No one would come north if they couldn’t go back down south… the effect would be shutting down all legal movement between the United States and Mexico.”

And that would have a “devastating economic consequence for the United States.”

Here’s why:

  • Over $1 billion in trade happens on a daily basis at the U.S.-Mexico border. According to the Office of the United States Trade Representative, the U.S. imported $339.8 billion in goods and services to Mexico in 2017, selling $276.2 billion — that’s a total of around $616 billion, making Mexico the United States’ third largest trading partner.
  • American farmers will feel the pain; Mexico is the top importer of American pork and corn, and the third largest importer or American soybeans.
  • Most of the U.S. supply of fresh fruits and vegetables comes from Mexico — so the prices of avocados, limes, and berries will skyrocket.
  • According to the Wilson Center’s research, five million jobs in the U.S. depend on U.S.-Mexico trade. Those jobs will be put at risk.
  • The movement of car parts depends on movement across the border. The United States purchases around $100 billion in car parts from Mexico to build cars here. Without the parts, factories across the United States would have to shut down in a matter of days, until another source for the parts is found.
  • Border communities in the United States that depend on commerce from Mexican clients — everything from shops to restaurants — will take a hit. When the San Ysidro Port of Entry shut down for five hours in November, the city lost $5.3 million.

Chairman of the American Corn Growers Foundation, Gale Lush, told ThinkProgress that farmers have already been hit hard by the trade war President Trump started with China. And continuing to be the collateral damage in what he called a game of “political football” is starting to take its toll.

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“A lot of the corn that gets exported goes straight to Mexico from Nebraska. We have a straight shot down there, with the railroads. Same with the pork. So this would be devastating,” said Lush, “We really don’t need this to happen.”

When asked how he’d like the administration to tackle the issue, Lush didn’t hesitate. “Get a bill that takes care of the migration problem so these people can get a legal green card to get up here and work,” he said.

“There’s a shortage of labor in this area… it’s a severe labor shortage. All the young people leave, and all you have left is their parents,” said Lush.

Blaming Mexico

On Sunday, the president issued more tweets, blaming the Democrats for “allowing a ridiculous asylum system and major loopholes” and accusing Mexico of “doing NOTHING, a very bad combination for our Country.”

Trump did not elaborate on what it would mean for Homeland Security to be not “sooo very nice” in the future. But it’s unclear just what, exactly, the president expects Mexico to do.

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Mexico “is totally beyond its ability,” said Wilson, to deal with the migrants at the border, trying to create space in overcrowded shelters to meet the needs of the tens of thousands of arrivals. And, he points out, the government of the country’s new president, Andrés Manuel López Obrador, has already changed Mexico’s policies to cope with the situation.

“Mexico has a new administration that came in and they attempted to change their immigration policy to a new, more open posture — a more welcoming posture,” said Wilson. This means granting humanitarian visas to Central American migrants, so they can stay and work in Mexico.

“I don’t know what else the United States is asking Mexico to do. I think Mexico is already committed to partnering with the United States to help solve this crisis. It’s totally unclear to me, what this additional pressure is needed for,” said Wilson.

ThinkProgress reached out to the Mexican embassy in Washington, D.C., for comment, but did not hear back.

Mexico’s Foreign Minister Marcelo Ebrard fired off a tweet on Friday saying Mexico would not base its response on threats. Obrador also told reporters on Friday that Mexico is there to “help, to collaborate” but that it would not get drawn into a fight or controversy over the issue.