Trump Prepared to Hurt the Economy: “Security is More Important Than Trade"

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In his ongoing feud with Democrats, Trump is prepared to do great harm to the economy.

The New York Times reports Trump Vows to Close Border, Even if It Hurts the Economy.

President Trump acknowledged Tuesday that closing the southern border with Mexico could damage the United States economy, but said protecting America’s security was more important than trade.

In remarks from the Oval Office, Mr. Trump reiterated his threat to shut the border if Mexico, America’s third largest trading partner, cannot restrict a flow of asylum seekers trying to cross into the United States. But the president’s economic team, concerned about the damage from such a move, said it was looking for ways to limit the fallout if Mr. Trump does do so.

“Sure, it’s going to have a negative impact on the economy,” Mr. Trump said, adding, “but security is most important.”

“Security is more important to me than trade,” he said.

Republican lawmakers, economists and business groups largely disagree with that assessment and warned this week that closing the border could cripple the flow of goods and workers and devastate American automakers and farmers, as well as other industries that depend on Mexico for sales and goods.

Economic Stupidity

It's not often I agree with the collective wisdom of economists, but this is one of those times.

I am aware of companies holding war room scenarios on how to circumvent traffic lines at border crossing choke points. Food, auto parts, medical supplies are among the impacts.

Instant Recession

A few days ago when these threats first emerged, I commented Trump Threatens to Close Entire Mexican Border: Instant Recession If Carried Out.

I am not the only one to mention the R-word. Here are some snips from the article above.

“Closing down the border would have a potentially catastrophic economic impact on our country,” Senator Mitch McConnell, Republican of Kentucky and the majority leader, said in an interview. “I would hope that we would not be doing that sort of thing.”

Mark Zandi, the chief economist at Moody’s Analytics, said that “a full shutdown of the U.S.-Mexican border of more than several weeks would be the fodder for recessions in both Mexico and the U.S.”

Severe and Sudden Impact

The impact will be so severe and sudden, if Trump is foolish enough to try this, he will be forced to quickly drop it.

Mike "Mish" Shedlock

Comments (64)
No. 1-25
Realist
Realist

If security is important, then why is Trump ignoring what the US military says is the most pressing security issue at the moment; a need to repair all the military bases that have been damaged to the tune of more than 10 billion dollars in the last year from extreme weather events. The military is being crippled and he is ignoring their pleas.

JavaMe
JavaMe

Well, if Trump wants to take a stand on the border this is the year to do it. Border shut down would likely cause big stock sell off. Central banks will panic and maybe we see a repeat of 1998. Stocks go into 2020 with a bubble top. Republicans sweep the elections. In the meantime, might be wise to move far away from the big cities ;)

AWC
AWC

So, shutting down the legal border passes, forcing even those who cross there to cross illegally by going around the ICE on-border checkpoints, enhances national security how? Also, will air travel both ways also be closed? So much for those who think borders can't be used to keep folks in as well as out.

For sure, all those wide open, scantly patrolled border areas are going to become real busy. And those who cross there won't need to produce papers, so there won't be long waits, so there's always that.

I guess a good thing too, is, we won't have any trouble finding a parking space at the Malls, Movie Theaters and Restaurants down here, sans all those Chevy Suburbans and Escalades with the Sonora Tags.

Can't see where this won't contribute to even more empty Mall space though. And I guess we'll need to pick our own produce when the farms all go "Pick Yourself." Not sure how the folks in Montana and Idaho are going to get their salads, maybe The Donald will buy them burgers, but hold the lettuce, onions and tomatoes?

Oh well, don't let the Logic Free Zone in DC know, that ideas have consequences. Ill-advised ones, even bigger consequences. Punishing Capitalists and their employees on both sides of the border doesn't seem like a very good way to "Win Friends and Influence People," but, some folks just learn better from a Dos por Quatro upside the Cabesa.