Border closure could cost billions


Closing the U.S. border with Mexico, which President Trump threatened to do in a Friday tweet if Democrats do not approve funding for his wall, could cost the economy billions of dollars, analysts who have studied the issue say.

“It would affect the U.S. economy massively and very negatively,” said Chris Wilson, deputy director at The Wilson Center’s Mexico Institute, and the co-author of a study on the border economy.

“There’s about a billion dollars of commerce that crosses the border every single day, so every day it’s closed we’re losing out on hundreds of millions of dollars,” he added.

{mosads}Trump threatened to close down the border as part of a broader fight with Democrats over building a border wall and funding the government.

“We will be forced to close the Southern Border entirely if the Obstructionist Democrats do not give us the money to finish the Wall & also change the ridiculous immigration laws that our Country is saddled with,” Trump wrote in the Friday tweet.

Trump is demanding $5 billion to fund his wall in order to reopen the government, while Democrats say they will only support legislation that includes $1.6 billion for border security, including $1.3 billion for fencing.

Mexico is America’s third-largest trade partner, and the two economies are deeply intertwined, with $558 billion in goods crossing the border in two-way trade last year alone. The Commerce Department estimated that in 2015, nearly 100,000 American jobs were supported by goods trade with Mexico.

If the border were to be shut down, experts say, the consequences would be immediate.

“The first thing you’d start to see is a spike in car prices and factories in trouble,” said Richard Miles, senior fellow at the Center for Strategic and International Studies’s Americas program.

A huge portion of American trade with Mexico deals in parts, so shutting the border would immediately throw a wrench into the auto supply chain, as well as other manufacturing.

Another major casualty would be agriculture, which would hit farm states already facing a squeeze from a trade war with China.

Miles noted that corn and soybean exports to Mexico are big business for farmers in Iowa, Nebraska, Minnesota, Illinois and Indiana.

American consumers would see the difference at the supermarket, said Wilson.

Many foods such as avocados, tomatoes, lettuce, celery and a variety of berries come to the United State by way of Mexico.

“It’s winter, so we don’t produce a whole lot of fruits and vegetables in the United States. By and large we depend on Mexico to supply our grocery stores in the winter,” said Wilson, who estimated that some 70 percent of that produce comes into the U.S. by truck.

Some of the states that would be the hardest hit by a border closure backed Trump in 2016.

Mexico comprised over 23 percent of imports for states such as Arizona, Michigan, Texas and Utah, which all went for Trump. Texas, Arizona, and South Dakota, all red states, each sent over a quarter of their exports to Mexico last year.

Border states would feel the brunt of the pain.

In September, nearly 8 million vehicles and 15 million passengers crossed the U.S.-Mexico border legally, according to data from the Department of Transportation.

“There are almost a million legal crossings every single day. In Tijuana alone, it’s like 50,000 vehicles and 25,000 pedestrians. That’s day laborers, nannies, landscapers coming in, and the other way around. It’s services like architects to engineers to high-skilled labor,” said Miles.

Around Thanksgiving this year, the government closed down the San Ysidro border crossing between San Diego and Tijuana for six hours, citing concern about migrants trying to rush the border.

The San Ysidro Chamber of Commerce estimated that those six hours led to an estimated $5.3 million in losses for the local economy alone.

“People depend on a functioning U.S.-Mexico border as part of their day-to-day life, in a way that few in Washington understand,” said Wilson.

Even something short of a full shutdown, such as increasing vehicle checks or otherwise slowing crossings, could be a major economic drag.

In the aftermath of 9/11, the government decided to inspect every vehicle, causing lines for kilometers, dramatically reducing crossings and leaving car manufacturers and other industrialists short on supplies.

But the current situation along the border, says Wilson, provides no security justification for closing the border completely.

“I think that it would be economically dangerous. The only reason to do it is if you have a massive national security imperative to do it. In the aftermath of 9/11 that may have made sense, but people fleeing violence in Central America is just not the national security crisis at the border that would justify,” he said.

Trump previously threatened to shutter the border in October, ahead of the November midterm elections, as he devoted significant attention to a caravan of Central American refugees and migrants headed toward the United States.

Tags Border wall Budget Donald Trump Mexico Shutdown
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