There is much talk about President Trump’s threat to close down our southern border with Mexico. While there are many aspects to this move to consider, let’s just look at our trade relationship with our third-largest customer.
What would the ramifications be of a border shutdown? We still do not have a finalized United States – Mexico – Canada Agreement (USMCA). The agriculture industry is just one of many sectors which could be affected by a border disruption. The President has already suspended Sunday commercial truck processing at the port of entry at Nogales, Arizona. The President says this is to reallocate officers to deal with the number of people trying to cross the border.
Longtime Ag trade consultant Craig Thorn says if the President shuts down the border in a manner he has considered, he will hobble the U.S. Ag sector.
As for the USMCA agreement, a border shutdown could throw a monkey wrench into the ratification which must happen in the legislative bodies of all three countries. The agreement is already skating on thin ice. The President has yet to lift the steel and aluminum tariffs on Canada and Mexico, which he placed on them before trade negotiations happened. Mexico, Canada, and members of both major U.S. parties have long been calling for these tariffs to be lifted. U.S. Trade Representative Robert Lighthizer spoke to this concern.
With House Democrats already wanting more labor and environmental considerations to be added to the USMCA, closing the border may just sour the chances of the agreement’s passage. Democrats are already looking to the 2020 elections and wanting more fuel for their fire. It is going to be up to President Trump to navigate this sticky situation.