Closure of the US-Mexico Border Could Cause Devastating Economic Losses

By teleSUR

04 April 19

The U.S. Chamber of Commerce estimates losses of up to US$1.7 billion a day in the U.S. economy.

.S. President Donald Trump's threat to close the southern border is considered by both Mexican and U.S. businessmen as an attempt to dictate the ongoing immigration problems, a foreign policy move which could severely affect the economies of both countries.

"The Trump Administration has always made threats and noise, trying to do as much as possible for its voters and always attacking Mexico," Francisco Rubio, the president of the National Chamber of Manufacturing Industries (Canacintra), said, adding that "nevertheless, something that favors us is that his government does not approve his decisions."

The leader of the Mexican industrialists said that they highly doubt the southern border will be closed, considering that it would mean millions in losses for both Mexico and the United States.

The U.S. Chamber of Commerce (USCC), which represents over 3 million companies, warned that the closure of the southern border could produce losses of up to $1.7 billion a day.

"Closing the US-Mexico border would only produce an economic calamity," Neil Herrington, the USCC senior vice president, said, warning that "a quick look at the numbers reveals that sealing off the southern border could lead to economic consequences even more devastating than a trade war with the Chinese."

In that sense, he recalled that the annual U.S. exports to Mexico (US$265 billion), which reached their peak in 2018, exceed those to China ($121 billion) by $144 billion. Nearly 80 percent of these exports were shipped to Mexico via truck or rail.

Besides causing a trade imbalance, President Trump's stance on the border issues threatens the ongoing U.S.-based industries' activities.

"Exports are just half of the equation. The overwhelming majority of the US$300 billion in goods the U.S. imports from Mexico also arrive via terrestrial means," Herrington explained, pointing out that "over the 25 years the North American Free Trade Agreement (NAFTA) has been in force, countless U.S. manufacturers have built integrated supply chains reliant on a steady stream of Mexican inputs."

In Mexico, Oscar Escobedo, head of the Secretariat of Tourism of the State of Baja California, also reported that "the economic issue has been shocking" even before the last statements of Trump. According to data from November and December of 2018, the number of tourists who visited Baja California decreased considerably due to the closures of sentry boxes that happened to propose the control of the migrant caravans.

The U.S. President said Tuesday that he was ready to close the southern border, although he recognized that there would be economic effects in both countries for such action.

"I'm ready to close it... If we don't make a deal with Congress, the border is going to be closed, 100 percent," Trump said and added that "sure, it's going to have a negative impact on the economy... but security is what is most important to me... we're going to have a strong border or we're going to have a closed border."