April 3, 2019 by David Silverberg
The big, immediate headline after President Donald Trump threatened to close the US border with Mexico was that the American avocado supply would dry up in three weeks.
That would certainly hit Southwest Florida, even though the state is a major avocado producer. Still, although an avocado shortage would hurt a lot of local restaurant menus, most Southwest Floridians could live a few weeks without guacamole.
But more seriously, the local impact of a border shutdown would depend on its extent and its duration.
For consumers, it would immediately be felt most keenly in the grocery shopping cart, later at the gas pump and possibly in a recession.
The closing
Trump announced the possible border closing during his visit to Lake Okeechobee on Friday, March 29, managing to divert national media attention from his supposedly great efforts on behalf of the Hoover Dike and the Everglades.
Since the offhand announcement, the administration, facing an uproar over its implications, has clarified that it would not apply to truck traffic (which is also one of the major means of drug smuggling into the United States).
Precise details of the closing remain sparse because the possible closing was hardly a carefully considered or vetted policy. Its nature and extent continue to rest on the whims and moods of Donald Trump. On Tuesday he reiterated his threat. “If they don’t stop them [migrants], we are closing the border. We’ll close it. And we’ll keep it closed for a long time. I’m not playing games,” Trump said.
Having lost the battle of the US government shutdown, it seems he’s seeking to shut down something new.
This prompted a rare dissent from even so staunch a Trump enabler as Sen. Mitch McConnell (R-Ky.), the Senate majority leader. “Closing down the border would have potentially catastrophic economic impact on our country,” said McConnell on Tuesday. “I would hope we would not be doing that sort of thing.”
Even conservative economist Arthur Laffer, inventor of the “Laffer curve” during the administration of President Ronald Reagan, said that a border shutdown “will hurt us a lot.” US-Mexican trade is “a win-win game on trade,” he said during an interview on Fox News.
Pain in the produce aisle
Mexico is currently the US’ third largest goods trading partner, according to the US Trade Representative. As of 2017, the most recent year for which statistics are available, US and Mexican two-way goods trade totaled $557.6 billion. Goods exports totaled $243.3 billion; goods imports totaled $314.3 billion. The U.S. goods trade deficit with Mexico was $71 billion in 2017.
The primary goods imported from Mexico were vehicles, electrical machinery and machinery, optical and medical instruments and mineral fuels like oil.
Since Southwest Florida is not a center of commerce or immigration and has no cross-border transportation, a border shutdown would not initially be felt by businesses here.
But a border shutdown would be felt by every American consumer and Southwest Floridians are no exception. Costs would rise exponentially, particularly for foodstuffs.
Mexico is the largest supplier of agricultural imports to the United States. In 2017 that trade totaled $25 billion. Leading categories included fresh fruit ($6 billion), fresh vegetables ($5.5 billion), wine and beer ($3.3 billion), snack foods ($2.1 billion), and processed fruit and vegetables ($1.5 billion).
Suddenly, these goods would become scarcer and prices would rise for all foods, even those produced in Southwest Florida like tomatoes and strawberries. Southwest Floridians would be facing substantially higher food bills.
Pain at the pump
A border shutdown would have big implications for oil and gas, both for consumers and for Southwest Florida itself.
There would be substantial pain at the pump. The US imported $11 billion in mineral fuels from Mexico in 2017. A US-Mexico border closing, coming on top of sanctions placed on Venezuelan oil would drive up gas prices even further than the significant increases felt over the past month. Southwest Floridians would know that there’s a border shutdown every time they filled the gas tank.
But then, with oil prices rising, exploring, exploiting and extracting Florida’s oil, both in the Everglades and offshore, would become much more attractive and urgent to oil companies. The combination of oil industry profit-seeking and the Trump administration’s environmental indifference would nearly guarantee drilling off Southwest Florida’s coast and in the Everglades, although that would take several years to implement.
Southwest Florida would feel a double whammy from a border shutdown: both high gasoline prices in the short term and a degraded environment in the long term.
Pain in the pocketbook
As stated at the outset, the full impact of a Mexico border shutdown would depend on its extent and duration. The longer the shutdown, the greater the pain and expense and the deeper the effects would be.
What can be stated with certainty is that Trump is systematically impoverishing the United States just as he bankrupted his gambling casinos. The US national debt has now ballooned 77 percent in the first four months of fiscal year 2019 to $310 billion, up from $176 billion the previous year. Under Trump the trade deficit has reached over $100 billion, going from $502 billion in 2016 to $621 billion in 2018, an increase of 19 percent. Particularly hard hit is the once healthy and thriving US agriculture sector, with previously prosperous farmers now having to rely on government aid due to an unnecessary trade war with China.
A border shutdown would deliver a blow to the economy as a whole and consumers across the nation and would be particularly painful in Southwest Florida with its population of retirees, seniors and people on fixed incomes who would have difficulty coping with skyrocketing food and gas costs.
Even the threat of a shutdown is proving disruptive and disturbing to commerce and consumers.
The conclusion is clear: an unnecessary and absurd border shutdown is no way to make America great “again.”
To read more about the impact of Trump trade policy on Mexican beer imports, see: “Farewell, my little Coronitas!”