The current slowdown at the US-Mexico border is causing substantial economic harms. Trade volume has grown substantially, more than doubling over the past 20 years and up 55% between 2010 and 2018. During 2018, total trade volume between the United States and Mexico exceeded $611.5 billion, with $265.0 billion in US exports to Mexico and $346.5 billion in imports from Mexico. In fact, recent data for January and February of 2019 reveals that, for the first time, Mexico is the top US trading partner.
The Perryman Group's Bordernomics study analyzes the economy of the US-Mexico border region in order to improve understanding of regional dynamics and identify actions which could generate meaningful improvement. The full study provides background information and a summary of current economic conditions, addresses the importance of NAFTA, describes challenges and opportunities faced in the border region, and estimates the business activity and jobs which could be added with enhanced cooperation among the US-Mexico border states.
In July 2014, National Guard troops in Texas were deployed to the US-Mexico border as a response to the influx of immigrants (mostly children) from Honduras, Guatemala, and El Salvador. While troops have been sent to the area on various occasions in the past, the deployment raised concern among some area residents and community leaders who fear that it could take a toll on the regional economy.
Every day, thousands of trucks cross the Texas-Mexico border, bringing a variety of goods ranging from fruits and vegetables to electronic equipment. Cross-border supply chains are common, and manufacturing facilities on both sides of the border depend on the efficient flow of products across the border. The recent slowdowns due to additional inspections disrupted these patterns, resulting in not only spoilage of perishable items, but also production delays. Given the strained capacity at the border in normal times, it will be difficult and, in many instances, impossible to “catch up.”
Dr. Perryman breaks down the losses from the slowdowns associated with the increased inspections at the border.
Dr. Perryman walks through the relevance of border blockages and the impact on the integrated US, Canada, and Mexico economies.
Dr. Perryman quantifies the impact and issues with the latest bill.
Dr. Perryman explains why this idea would not be an effective strategy, and provides an alternative solution.
The chaos at the border is now impacting the flow of goods back and forth. Dr. Perryman has been looking at the cost to our economy.
The border adjustment tax being discussed as part of a House Republican tax package might bring in more revenue, but for a lot of reasons, Dr. Perryman calls it a bad idea.