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Are avocados toast? What shutting the US-Mexico border would mean
WASHINGTON, April 4, 2019 (BSS/AFP) – Picture an economic shockwave:
Thousands of workers laid off and supermarket shelves made barren. Auto
plants darkened overnight.
Precious supplies of avocados, so dear to American hearts, wiped out,
while other fresh fruits and vegetables also rot in trucks, with supplies
exhausted in as little as 48 hours.
Fuming over migration, President Donald Trump on Wednesday reiterated his
threat to close the US-Mexico border — among the busiest in the world,
across which $1.7 billion in goods and hundreds of thousands of people travel
in both directions every day.
This has drawn a collective gasp from economists, Congress and industry,
who fear a catastrophe that could tip the world’s largest economy into
recession as ties with Mexico, its third-largest trading partner, grind to a
halt.
“It comes close to being unthinkable,” Daniel Griswold, director of the
trade and immigration project at George Mason University’s Mercatus Center,
told AFP.
He spoke of waves of joblessness, lost business and deepened suffering
among farmers who have already been hurt during Trump’s multi-front trade
wars with China, Europe, Canada and Mexico.
“It would be like erecting a wall in the middle of the factory floor. It
would be a complete disruption and it wouldn’t be immediately undone if the
borders re-opened.”
“The losses would be huge and grinding,” he added.
Top White House economic adviser Larry Kudlow said Tuesday US officials
were working to minimize the economic impact from any closure of the border –
– including keeping truck lanes open.
On average, more than 17,000 trucks cross into the United States from
Mexico every day, according to US Bureau of Transportation Statistics,
hauling the lion’s share of the $612 billion in two-way trade recorded last
year.
US officials say the port of San Ysidro, which lies between San Diego,
California and Tijuana, Mexico, is the busiest land port in the Western
Hemisphere, processing 70,000 northbound vehicles and 20,000 northbound
pedestrians every day.
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In 2018, the largest US imports were Mexican-made autos and auto parts,
which together totaled $114 billion, according to Commerce Department
figures, while just in petroleum and coal products, industrial chemicals and
machinery, the United States sent back more than $70 billion.
– No seatbelts? No cars –
The 1994 North American Free Trade Agreement — which Trump is seeking to
replace with a revamped version — allowed manufacturers and farmers to
exploit continent-wide supply chains, taking advantage of low-cost labor in
some regions and high-tech capacities in others.
Auto manufacturers have therefore interwoven their supply chains across
North America, with parts produced in one country added in others, meaning
motor vehicles may cross borders repeatedly before they are completed.
And halting this trade would do nothing short of drive the US economy into
recession, according to Kristin Dziczek, vice president of the Center for
Automotive Research.
“We see all production halting within a week,” she told AFP, adding that
this would result in immediate layoffs.
Just-in-time supply chains mean there are no reserves to fall back on in
case of a border closure, according to Dziczek.
“As soon as they don’t have one part, production stops,” she said.
Mexico provides about 70 percent of all the wiring harnesses used to
transmit power within US-manufactured vehicles and 60 percent of the
seatbelts, meaning American auto plants would be crippled without the
Mexican-made goods, she said.
“Want to buy a car without a seatbelt?” she asked, noting that it was
illegal in the United States to sell incompletely assembled vehicles.
– Agricultural imports –
For each US auto assembly worker, there are seven to nine other jobs in
industries directly dependant on auto production and marketing: shipping,
rail, accounting, engineering, advertising, she added.
Meanwhile, Mexico is also the largest source of US agricultural imports,
sending more than 6 billion pounds (2.7 million metric tons) of produce
northward annually — feeding much of America in the colder months when fresh
fruits and vegetables are out of season.
Perishable tomatoes, cucumbers, eggplants, bell peppers, mangoes and
avocados do not languish in warehouses, according to Allison Moore, vice
president of the Fresh Produce Association of the Americas in Nogales,
Arizona.
“We’re not in the storage business,” Moore told AFP. “You’re gonna see us
run out of product in two days, max.”
Research produced with the University of Arizona, a US state that sits
atop a fertile corridor of farmland south of the Mexican border, shows that
nationwide about 30,000 US jobs are tied just to importing Mexican tomatoes,
she said.
“When there’s no work at local warehouses, there are gonna be layoffs,”
said Moore.
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