Trump Threatens to Close Entire Mexican Border: Instant Recession If Carried Out

-edited

Trump threatens to close the border in a Tweet complaining "‘Mexico has for many years made a fortune off of the US".

Once again Trump puts his trade ignorance on display whether you agree with him about the wall for other reasons.

Please consider Trump Threatens to Close Border If Mexico Doesn’t Stop Illegal Entries.

President Trump threatened Friday to close all or a portion of the U.S. southern border if Mexico didn’t immediately work to block all illegal immigrants from crossing. Writing on Twitter, the president also said Mexico made a large amount of money from the U.S. while doing nothing to stop the migrants.

“If Mexico doesn’t immediately stop ALL illegal immigration coming into the United States [through] our Southern Border, I will be CLOSING…the Border, or large sections of the Border, next week,” Mr. Trump wrote. “This would be so easy for Mexico to do, but they just take our money and ‘talk.’ Besides, we lose so much money with them, especially when you add in drug trafficking etc.), that the Border closing would be a good thing!

A senior Department of Homeland Security official said after the tweet that Mr. Trump was stating his intention to close some ports of entry if necessary. “It’s on the table,” the official said. “I will make a recommendation accordingly to the president.” The official said the U.S. had made additional proposals to Mexico. “We have walked through a whole variety of things they can do for enforcement.”

Idle Threat?

I don't know.

I do know that shutting the border would be damn foolish.

Many businesses get parts from Mexico. In addition, many workers cross the border legally every day to work in the US.

The border between El Paso, Texas, and Juarez, Mexico comes to mind.

El Paso - Juarez

Please consider Cross-border life in Juárez, El Paso

Almost 20,000 pedestrians a day join crossings by 35,000 cars and 2,500 cargo trucks between Juárez and El Paso. For 2017, the U.S. Department of Transportation calculated 41 million northbound non-commercial crossings from Juárez to El Paso, a tally just more than California's population.

While the Tijuana, Mexico-San Ysidro, Calif., region ranks as the world's largest land border in terms of crossing volume, Juárez/El Paso is the world's largest urban border region. The two cities' immediacy -- separated only several hundred yards by a wide, concrete river bed -- makes international border crossing a fundamental part of life for residents on both sides.

There's a strong, interdependent relationship between Mexico's powerhouse manufacturing city of Juárez and El Paso, which is strategic to U.S. security interests and a transportation hub for trains, trucks, buses and cars, midway between the west and east coasts.

"For every four low-paying jobs created in Juárez, there is one high-paying job created in El Paso," said Jon Barela, who leads a non-profit organization dedicated to economic prosperity in the region. Almost 300,000 people work in Juárez's manufacturing sector, composed of about 300 maquiladoras, factories run by American companies.

"In retail trade, 20 to 30 percent in the Borderplex region is done by Mexican nationals who come to eat, shop or play," Barela said. "That's a significant contribution to the economic health of our region."

Trade is a Two-Way Street

Trump views trade in which one side is a winner and the other a loser. Trade does not work that way. Both Mexico and the US benefit. It's debatable who benefits more, but I suspect the US.

Regardless, the notion that Mexico has made a fortune at the expense of the US is flat out preposterous.

One can support the wall while not supporting the notion of closing the border as Trump threatens to do. Perhaps Trump does not mean it the way he stated things, but who knows?

If parts and local traffic are disrupted there will be serious and immediate negative repercussions and I believe and instant recession.

Only fools want to "close the border".

Mike "Mish" Shedlock

Comments (59)
No. 1-22
abend237-04
abend237-04

Trump has tapped a rich vein of rage that a large portion of the middle class feels towards both national parties and the Mexican government. Neither party gives a damn about immigration law enforcement. Democrats want the votes and both parties want the cheap labor. Mexico just wants the money. Trump may just shut it down. The narcos, who have owned the Mexican government for many years now, may be making too much from human peddling at this point to allow it to stay closed for long. Interesting times.

Realist
Realist

I completely agree with you Mish. Closing the border for any significant period of time could indeed cause a severe economic slowdown. I doubt that Trump is actually stupid enough to do it. I suspect he is just using his favourite tactic - the politics of hate - to bolster support within his base. It’s classic. Focus attention on some perceived “enemy”. His supporters always eat it up.

The only difference between Trump and others who have used this strategy, is that he targets more than one enemy group; Mexicans, Canadians, Latins, Europeans, Asians, any non-whites, LGBT, Democrats, John McCain, etc etc

2banana
2banana

Mexico refuses to stop illegals. In fact, they openly encourage it.

The only way they will stop illegals is if they feel some pain.

Mish
Mish

Editor

Do you cut off your arm if your finger has pain?

shamrock
shamrock

Nothing orange man says can be taken seriously.

2banana
2banana

1.5 million illegal predicted for 2019. Each will get free health care, free housing, free education, free food, etc. etc. etc.

Assume at least $40,000 per illegal.

Thousands of Americans raped and murdered. Tens of thousands of armed robbery.

That wall is looking like a bargin.

Tengen
Tengen

I started laughing involuntarily when I read this. The world has become a joke, so much noise with so little result. Trump could promise stuff like this every day (and frequently deliver) and none of it matters until central bankers are brought back to earth. Make the border more open than ever or shut it completely, neither will work with the Fed running the show this way.

Off topic, but did anybody here see that Putin has criminalized criticism of the Russian government under the guise of fighting fake news? Wonder how long before that becomes official here. We already have unofficial censorship from our tech giants, but it's a matter of time before 1A is formally curtailed "for our own good".

Aaaal
Aaaal

Who is going to do our shit jobs, like rolling tacos, flipping burgers, & scrubbing toilets? And how will we get our illegal drugs? No more McDonald's for you Orangina!

AWC
AWC

There's a whole lotta businessmen, ranchers, farmers, medical/dental tourists and families gonna turn blue, both figuratively and politically if this border gets shut down. Not to mention other transborder professional workers, school teachers, doctors etc. that cross for work each day.

Think of it like this. Take a city like, say Denver, cut it in half, east to west, not allowing commerce to flow north and south, and watch what happens to it's economy.

Hell, threatening stunts like this is enough to turn both Texas and Arizona blue. These daily crossers aren't welfare recipients, they are productive workers.

timbers
timbers

S would this be like a Mexexit?

timbers
timbers

Trump should introduce legislation for Universal Single Payer medical care for all or MedicareForAll but w/o copays. It would save the Federal govt alone about $300 billion/yr. Then Trump could sit back kick his heals up and watch Dems oppose it as his popularity pops the 50% for the first time.

Boot6761
Boot6761

take the existing laws off the books and then there will be no basis for enforcing what exists today...this is not about the working class people such as americans and mexicans who go to work everyday...its about enforcing those who come here...stay...and do not try to become citizens...which has been the problem from the get go...but the "worry" about the economy has superseded laws from the beginning of time...

KnotchoLibre
KnotchoLibre

Clearly we can all benefit from more open borders for trade, include trade of human resources, but what might happen, from the viewpoints of Mises or Rothbard etc. if we were to open up the borders for people (services) much like we do for goods.

What are the real factors that become detrimental to such an extreme of just requiring that people come in with "proper ID", whatever that is, and perhaps a 90-day visa or similar? If we were more effective about limiting the welfare system to US Citizens but still applied taxes on income for anyone working in the country that would be to our benefit as a nation.

Six000mileyear
Six000mileyear

Closing the border won't stop telecommuting.

Blurtman
Blurtman

Salsa will have to come from New York City!

Blacklisted
Blacklisted

Closing the border is akin to sanctions, which are used to inflict economic pain to encourage those affected to rebel against their govt. Those Americans and Mexicans, that don't know there are massive problems caused by a welfare state with porous borders, will at least be given the motivation to think, and hopefully demand immigration reform. This same tough love is also needed in all of the other bubble industries corrupted by govt - military, healthcare, banking, tuitions, etc.

Govt never proactively tries to solve problems, and most people are the same. Most law abiding citizens never get to experience our corrupt court system, or the epidemic of human trafficking that is enabled by our anemic border security. Closing the border gives more people the motivation for change - no pain, no gain.

Besides, a global recession is underway, with or without the reduced activity that would come with closing the border. Govt's or CB's CANNOT eliminate the business cycle (or climate cycle), they only increase the amplitude - and the current debt bubble is no different. Unfortunately, there is no easy way to fix the problems caused by govt.

Another example is the bubble in healthcare costs caused by squashing competition, not enforcing EXISTING anti-trust laws, and forcing price transparency. If these corrective actions did take place, prices would collapse by 40%, and with healthcare being 18% of the economy, GDP would see a 7.2% contraction. Would that be painful? Yes, especially for those fraudulently benefiting from govt protection. Is it necessary? Absolutely! The same applies to defense, banking, and the other industries infected by govt meddling. Why wouldn't the govt-induced crisis at the border be any different? Pussy's never want to endure any pain to achieve the gain.

WJ03
WJ03

Cause a recession? Absurd twaddle. Reagan closed the border in 1985 and I don't recall a recession resulting from that.

What rational being believes we can continue to import millions and millions from the third world and survive as a first world country? I said rational beings which apparently excludes many commenters on this site.

Mish
Mish

Editor

Realist: "I completely agree with you Mish. Closing the border for any significant period of time could indeed cause a severe economic slowdown. I doubt that Trump is actually stupid enough to do it. I suspect he is just using his favourite tactic - the politics of hate - to bolster support within his base."

Realist and I disagree on some topics but we agree on this one. I highly doubt Trump will carry this threat through. But yes, a shutdown longer than a couple of weeks would cause a recession. We are on the verge of one now.

We get far more stuff from Mexico now than under Reagan. Think Auto parts and even medical supplies. And our goods headed to Mexico will also stop as Mexico retaliates.

The entire global economy is teetering and it will not take much to throw it over the edge. Then The Realist has his out: No recession unless there is a shock. I believe he said something like that.

I think we have a recession shock or not, but a shock will deepen the impact for sure, an idea I believe The Realist would accept.

truthseeker
truthseeker

I am absolutely ashamed that our governor did not have us prepared for this invasion down at McAllen Texas where these invaders continue to push in at 800 people a day with the children leading the way of course. The Democrats I believe are behind this wanting to flip Texas and they might just do it!

THX1138
THX1138

Hasn't Mish been calling for a recession for months (years) now?

Escierto
Escierto

For the Trump rocket scientists out there who think this is a good idea, I offer one example. The giant Toyota truck factory in San Antonio which manufactures Tundras and Tacomas depends on some parts from Mexico. Most of the parts are produced locally but not all of them. If the critical parts from Mexico do not arrive the entire assembly line shuts down. So I think he should go ahead and shut the border for a week or two and see how that goes. My wife could use a couple of weeks off. Heck make it a month.

Brother
Brother

So the government can shut down for weeks and cause no damage but shut down the border and it's instant recession?