By Bradley Pasekoff
The border between the United States and Mexico is not new to controversy. This area has become increasingly important recently due to the stances taken by some of the United States’ largest political figures. Most notably of these was President Donald Trump, who promised to build a wall spanning across the entire border in order to inhibit Mexican immigrants from entering the US. While the plan was never fully completed, the national spotlight on the area has not decreased.
Aside from political discussions, this area is also prone to economic discussions, particularly due to the massive amount of trade that occurs between the two nations, with Mexico importing roughly $289.5 billion of U.S. goods and services, while the U.S. imports totaled $387.8 billion. To say this area is of economic importance would be an understatement.
Thus, the current protest at a key Texas bridge connecting the two countries carries even more importance, on both national and global scales. The blockage has stemmed from Texas Governor Greg Abbott’s newest mandate “requiring extra inspections of commercial trucks [as] part of [his] sprawling border security operation” (Weber). Part of Abbott’s 2018 campaign platform was to increase border security, with the intention of eliminating human trafficking and the illegal import of drugs. While most would agree these are important policies to provide for the safety of all, these measures may be redundant. The U.S. Customs and Border Protection Department has called this mandate unnecessary to the security of the nation (Hurtado). Additionally, these inspections may also lead to some particularly detrimental effects on the economies of both nations.
It is estimated that in only the first six days since the mandate has gone into effect, “almost one-fourth of the more than 3,400 commercial vehicles inspected ‘were placed out of service for serious safety violations.’”(Hagan, Chapa). Taking into account that many of these trucks contain some type of produce and southern Texas’ warm climate, these delays may prove catastrophic to those in Mexico reliant on their seasonal exports to the U.S.
In a sign of good news, however, Abbott has seemed to soften his stance in recent days. On April 13, he held a news conference with Samuel Garcia, Governor of Nuevo León, Mexico, where they “hashed out an agreement to lift… inspections in that one area” (Reiley, Sieff). While this is a positive step, more sweeping changes will be needed to reverse the damage that has been done. As a consequence of the new mandates, various other choke points across the border have similarly seen long lines, with some lasting as long as 12 hours without resolution. Until the entire border is back to normal levels of economic activity, losses will ensue.
While the exact economic consequences of this backup are still unknown, the estimates seem grim. According to Mexico’s Chamber of Freight Transportation, the blockades have cost the Mexican economy “as much as $40 million in losses in just five days” (Smith, Buchman). This is a staggering total and could be only the tip of the iceberg in terms of the amount of exports that will be eliminated from the Mexican economy.
Equally devastating is that small businesses in the U.S. now must fill the void left by this new policy. Little Bear Produce, a popular supplier of numerous types of produce, has documented its recent struggles. The company has claimed losses of over $100,000, specifying the loss of “10 to 12 loads of watermelon per day from Mexico, as well as different kinds of herbs and greens” (Reiley, Sieff). They have thus been forced to source their produce to other farms, increasing their costs on multiple fronts. Even though this is only one example of a small business dealing with these additional obstacles, this story is undoubtedly shared by many others who are now scrambling to limit their financial losses.
Beyond the issues experienced by small businesses are the supply chain issues now imposed upon numerous sectors. Goods ranging from electronics to machinery to steel are in danger of experiencing significant delays, with these setbacks only worsening by each passing day. Given that the U.S. ranks first in GDP and Mexico 15th, setbacks from these trade blockages have the potential to do significant harm to the global economy, an unwelcome stressor on an already tense global situation.
At the end of the day, the only determinant to the size and duration of this controversy is the effectiveness of the political discourse between both countries. If they are able to come to some compromise relatively quickly, this may be nothing more than a speedbump in an otherwise successful diplomatic relationship between the two nations. However, if this issue lingers for an extended period of time, the US–Mexico relations may be significantly hurt. Only time will tell which path this controversy will follow.
References
Hagan, Shelly, and Sergio Chapa. “Truck Blockade at Mexican Border Imperils $440 Billion Trade.” Bloomberg.com. Bloomberg, April 12, 2022. https://www.bloomberg.com/news/articles/2022-04-12/blockade-at-mexican-border-risks-avocado-auto-parts-shipments.
Hurtado, Daniela. “Gov. Abbott Easing Inspections at 2 International Bridges after Days of Backlog at Border.” ABC13 Houston. KTRK-TV, April 15, 2022. https://abc13.com/texas-mexico-border-delays-chaos-at-the-texas-gov-greg-abbott-inspection-of-commercial-vehicles/11748885/.
Reiley, Laura, and Kevin Sieff. “Economic Toll in Texas Worsens as Trucks Remain Stopped at Mexico Border.” The Washington Post. WP Company, April 15, 2022. https://www.washingtonpost.com/business/2022/04/14/texas-truck-mexico-inspection/.
Smith, Nick, and Cassie Buchman. “Truck Inspections, Blockade on Border Bring $40m in Losses.” NewsNation. NewsNation, April 14, 2022. https://www.newsnationnow.com/us-news/southwest/truck-blockade-at-mexican-border-costs-40m-in-losses/.
Weber, Paul. “Trucker Blockade Snarls US-Mexico Border over Texas Order.” The Hill. The Associated Press, April 13, 2022. https://thehill.com/news/wire/3266348-trucker-blockade-snarls-us-mexico-border-over-texas-order/amp/.