Trump Administration Threatens to Close U.S. - Mexico Border

Last week, President Trump and leaders within his administration continued to threaten a full or partial closure of the U.S. - Mexico border. Border agents are faced with the daunting task of preventing thousands of illegal crossings as well as detaining thousands of aspirational migrants from Central American countries. While the U.S. government attempts to exercise every tool at its disposal to protect its borders, including increased screenings at points of entry and deployment of military personnel, the latest threat to close the border could mean significant disruptions for manufacturing and food/produce supply chains.

The threat of closing the border comes as Congress approaches consideration of the USMCA agreement, the successor to NAFTA, which would modernize trade practices between three North American countries that account for more than $1 trillion in annual trade. Sixteen percent of all U.S. exports go to Mexico, and more than 14 percent of U.S. imports come from that nation. Mexico is second only to Canada as an export market for the U.S., and third as a source of imports behind Canada and China. Major manufacturing supply chains, including automobiles and high-tech devices, cross the southern border multiple times before goods go to market.

Mexico is also a key source of seasonal produce for the U.S. Since most freight cross the border either by truck or by train, the economic consequences of a short- or long-term border shutdown could potentially have significant impacts on pricing and capacity for those modes of transportation domestically.

TIA staff will continue to monitor this issue as it develops. For more information, or to participate in TIA’s International Logistics Conference, please contact Will Sehestedt at sehestedt@tianet.org.