Mexican Border Closure Would Prove Costly For Trucking
By Marek Krasuski
“May you live in interesting times” is an expression commonly attributed to traditional Chinese lore. Regardless of its debatable origin though the aphorism seems particularly relevant to today’s political climate. Take stock of the blue wave sweeping this country. In 2015 over 30 million Canadians lived in provinces and territories run by left – of-centre governments, mainly Liberal and NDP. Just four years later only 1.5 million Canadians can make the same claim. Conservative and right-of-centre governments are now in charge in Ontario, Quebec, New Brunswick, Manitoba, Saskatchewan and most recently Alberta with the electoral victory of Jason Kenny and his United Conservative Party. And south of the border political intrigue dominates the news. Say what you want about Donald Trump, but the US President never fails to rally his supporters, enrage his detractors, and mystify millions of apolitical observers normally detached from the political fray. His pronouncements, whether enacted into law or languishing in the background as potential threats to employ at a politically expedient future date, always elicit impassioned response.
One such threat voiced in early April, and one that would have serious repercussions for the trucking industry, is Trump’s intention to close the Mexican border. Shutting the border would bring havoc to integrated supply chains that run between Canada, the United States and Mexico. In fact, even the threat of the closing uttered nearly a month ago soon caused frustration leading to financial costs. Following his announcement, trucks delivering goods from Mexico to the US faced up to 12 hours of gridlock after border agents were transferred to enforce Trump’s principal objective – stem the tide of immigrants. Border agents were redirected to help with processing migrants entering the United States. Illegal immigration, in fact, is what prompted President Trump to issue the border closure threat, citing Mexico’s failure to stop immigrants from pouring into the United States seeking a better life. Truckers caught in the gridlock feared they could face millions in fines for late delivery of goods and possibly the cancellation of their contracts with clients. The reshuffling of border agents also led to the reduction of truck lanes for the inspection of imports into the US, prompting fears of a significant loss for transportation companies, drivers and factories, among other economic casualties.
For now at least, Trump has held back on his threat, not least because of strong advice from the American business community. There is $1.5 billion in daily trade between the US and Mexico, and any action that blocks commerce at the border would be harmful to the US as well as to Mexico. Car makers, for example, export about 2.6 million Mexican-made vehicles to the United States, accounting for about 15 percent of all vehicles sold in dealerships around the country. It is predicted that disrupting the flow of trade in the auto sector could result in the closure of many US auto parts plants which depend heavily on components brought in from Mexico.
Americans would suffer, too, from a shortage of produce brought in by trucks from Mexico. More than 60 percent of all fresh foodstuffs shipped into the US during the winter and early spring hail from their southern neighbour. Any disruption, therefore, would first result in a price surge for fresh fruit followed by their untimely disappearance from grocery shelves as inventories are quickly scooped up by hungry consumers.
As well, American farmers would pay a heavy price since Mexico is the third largest market for US agricultural products. Mexico is also the largest export market for American corn, pork and dairy products. Again, deficiencies in the agriculture trade relationship would not only hurt farmers who are already buckling under the financial strain of falling farm prices, but the many transportation companies that deliver the products over the border would also fall victim to the damn in the flow of goods.
Closing the border would spell economic suicide for the US and for Mexico as well. To the relief of many Trump has back-pedaled on his threat, citing cooperation from Mexico to halt illegal immigration as the reason, rather than the more plausible explanation – dire warnings from US business interests. Still, it’s hard to predict how the president will act, and if he may in fact close the border at some future date if he doesn’t get his way. In Trump’s posturing, illegal immigration does “trump” the economy according to
statements he made at the White House in early April. “Let me just give you a little secret: security is more important to me than trade. I’m totally prepared to do it. We’re going to see what happens over the next few days.”
Should the president make good on his preference for so-called security over commerce and close the border, it seems that trucking will rank as just one of the many commercial stakeholders to pay a heavy price.☚