U.S. auto plants would shut down within a week if border closes, economist says

By | April 2, 2019

CNN reports:

The entire US auto industry would shut down within a week if President Donald Trump goes through with his pledge to close the US-Mexican border, according to a leading expert on the industry.

That’s because every automaker operating an auto plant in the United States depends on parts imported from Mexico, said Kristin Dziczek, the vice president of industry, labor and economics at the Center for Automotive Research.

About 16% of all auto parts used in the United States, both at assembly plants and sold at auto parts stores, originate in Mexico. Virtually all car models in America have Mexican parts, she said. Because of that reliance, she said the auto industry would stop producing vehicles relatively quickly.

“You can’t sell cars with missing pieces,” she said. “You’ve got to have them all. I see the whole industry shutdown within a week of a border closing.” [Continue reading…]

Politico reports:

President Donald Trump’s senior economic aides are scrambling to impress upon him the potentially dire economic costs of his threat to shut down the U.S.-Mexico border, according to two people familiar with the matter.

Both Kevin Hassett and Larry Kudlow, the president’s top economic advisers, have shared papers and data with Trump over the last 36 hours, illustrating the way economic growth could slow down even if the president shut down the border for just one day — not to mention the effect on the flow of goods, raw materials and the U.S. supply chain.

Inside the White House, officials frantically spent the day searching for ways to limit the economic impact of shuttering the border, according to two senior administration officials and one Republican close to the White House. One possibility involved closing the border to cars but allowing commercial trucks to continue to pass through. Officials stressed, however, that no final decisions had yet been made.

Publicly, Republican leaders expressed their own dismay at the threats, which Senate Majority Leader Mitch McConnell called potentially “catastrophic.”

But Trump did not seem swayed. “Sure, it will have a negative effect on the economy,” Trump told reporters in the Oval Office on Tuesday afternoon. “But to me, trading is very important, the borders are very important, but security is what is most important. I mean, we have to have security.” [Continue reading…]

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