From cars to avocados, closing the Mexican border would cut deep into the economy

From cars to avocados, closing the Mexican border would cut deep into the economy
Mexican growers were responsible for roughly 267 million of the 281 million pounds of avocados that entered the U.S. market last month. (Source: @minan1398/Pexels)

(Gray News) – Every day, millions of avocados, tomatoes, limes and other fruits and vegetables cross the southern border with Mexico, on their way to a grocery store and, ultimately, your plate.

In the other direction, hundreds of millions of dollars in American goods like electronics and machinery head to Mexican buyers.

If President Donald Trump follows through on his threat to close the southern border, the hum of this well-oiled trade machine with the nation’s second-largest trading partner could come to a halt.

The president wants to stop the flow of migrants coming through Mexico, largely from Central America, and arriving at the U.S. to apply for asylum. He holds a range of parties, from Congress to the Mexican government, responsible for the migrant surge – which has resulted in record apprehensions - and sees the border itself as something he can use to leverage pressure on the issue.

“If no action, Border, or large sections of Border, will close,” Trump promised again Wednesday in a tweet. “This is a National Emergency!”

Closing the border, though, would stop far more than just people from entering the country.

The overwhelming bulk of avocados in U.S. supermarkets right now, for instance, come from Mexico - according to California Avocado Commission data, last month Mexican growers were responsible for roughly 267 million pounds of avocados entering the U.S. market.

All other sources accounted for about 14 million pounds.

One industry executive projected to Reuters earlier this week that it would take just three weeks for avocados to run out under a border closure.

Tomatoes offer a similar story – according to the most recent full U.S. Drug and Food Administration report, so far this season Mexican imports are responsible for about 44 percent of the nearly 2 billion tomatoes that have shipped around the country. There’s virtually no domestic lime production, and of total imports, Mexico accounts for about 98 percent of the 724.5 million that have come to the U.S. this season.

“Disruptions of weeks, days, or even hours cut supply chains meaning lost wages and lost revenues,” the United Fresh Produce Association said in a statement.

The group said it was urging the Trump administration “to reconsider these steps that would profoundly interrupt our ability to bring fresh, healthy produce to all Americans.”

Depending on how the administration were to craft a border shutdown policy, importers could possibly look to divert supply lines to air and sea shipments, though those would likely be far more expensive. It might work for more niche products like bottled tequila, but is unlikely to provide much relief for importers of perishable vegetables and fruits.

Anyone who’s ever cut open an avocado and kept half of it in the fridge for a day knows they don’t last long.

Closing US-Mexican border would be catastrophic to businesses

A border shutdown would also likely spark a number of legal challenges from importers, likely including the automotive industry. Much car manufacturing done in the U.S. still relies on parts imported from Mexico – about 16 percent of all auto parts, according to CNN, everything from transmissions to seat belts.

“The building of vehicles requires 100 percent of the parts to be there," Kristin Dziczek of the Center for Automotive Research told The Washington Post.

Tim Meyer, a law professor at Vanderbilt University and the director of the International Legal Studies Program at the school, likened the possible legal battle to what the Trump administration faced after hastily imposing a ban on the entry of citizens from seven predominantly Muslim countries in early 2017.

“The challenge could be very similar to the one the travel ban faced, that essentially immigration law doesn’t authorize the closure of the border the way the president has done it, with respect to goods,” Meyer said. “I think you could expect to see those auto manufacturers in court, they would have a clear economic interest.”

The Washington Post reported this week that the administration is looking at ways to enforce a border closing without significantly impacting trade. It’s not clear, however, how they would carve out those kinds of exemptions.

“Like a lot of administration policies, the staffers in the White House are now trying to fill in the details of what that would look like, as well as the legal authority,” Meyer said. “It’s not that they sat down and said, ‘Well, we have the legal authority to do this and here’s what we’ll do.’ It’s the other way around. The president is just sort of throwing ideas out there, and if he decides to go forward it’ll be up to his lawyers to try to put forward the best legal action.”

Mexico, meanwhile, would also likely retaliate in some way. That could come in the form of filing a dispute either under the NAFTA agreement governing trade between the U.S. and Mexico, or with the World Trade Organization.

Or, Meyer said, they could retaliate with their own set of punitive policies, such as tariffs on U.S. exports.

“Mexico you could imagine would be under pressure domestically to retaliate immediately, without waiting to go through either the NAFTA or the WTO system,” he said.

The president, however, has insisted he can live with the drawbacks economically in order to achieve his immigration objectives.

“Sure, it’s going to have a negative impact on the economy. It’s a very big trading partner,” he said at the White House on Tuesday. “But let me just give you a little secret, security is more important than trade.”

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