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NRF Says US-Mexico Border Closure Would Hurt Retail Supply Chain

$1.7 billion each day.

That’s the minimum daily volume of U.S. trade with Mexico, according to the National Retail Federation, which said Thursday that a closure of the U.S.-Mexico border would have a severe impact on U.S. retailers, workers and consumers.

Though President Trump appeared to backpedal on his threat to seal off the border, saying Thursday that he would delay the closure for a year, he said at the White House that if the flow of illegal drugs from Mexico doesn’t stop, he’ll consider the border shutdown and possible even potential tariffs.

“We share the administration’s goal of fixing the nation’s broken immigration system and enhancing border security,” NRF president and chief executive officer Matthew Shay, said, adding that there is no way to close the border without inflicting serious damage to the American economy.

“Closing the border for any length of time would result in significant supply chain disruptions for U.S. retailers,” NRF’s ceo explained. “These disruptions would reverberate throughout the supply chain, impacting everyone from truckers to warehouse workers whose jobs depend on the two-way trade with Mexico. The end result would be be job losses, factory shutdowns, increased consumer costs and reduced product availability across the country.”

Those were the key points in a letter NRF sent Thursday to U.S. officials including: Steven Mnuchin, secretary of the treasury; Robert Lighthizer, U.S. trade representative; Wilbur Ross, secretary of commerce; Larry Kudlow, director, National Economic Council; Kirstjen Nielsen, secretary of homeland security, and Keven Hassett, chairman, Council of Economic Advisors.

In the letter, NRF noted, “Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs-42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy.”

The letter went on to say, “Everything from consumer products destined for retail store shelves to intermediary inputs for manufacturing facilities travel across the border,” noting that any closure would disrupt the retail supply chain.

In addition to workforce disruptions and reduced sales for retail members that operated along the Southern border, Shay said, “Our members not only rely on Mexico as a source of fruits and vegetables, electronics, appliances, auto parts and apparel, but also rely on the Mexican market for retail operations. Mexico is a key market for U.S.-based retailers and restaurant chains that depend on cross-border trade to ensure system-wide standards so that Mexico consumers get the same quality and selection as U.S. consumers.”

Shay emphasized the need for the “administration to ensure that the free flow of legal trade and travel continues through our southern border….Resorting to a border closure would merely be a self-inflicted wound to the American economy.”

On Tuesday, President Donald Trump told reporters in the Oval Office that while he’s pleased with steps Mexico has taken to prevent migrants from entering the U.S. illegally, if Mexican officials stop doing that or if there’s no deal with Congress, the border would be closed. “100 percent,” he said.

At about the same time, Mitch McConnell (R-Ky.), the Senate Majority Leader, agreed that there is a “border crisis,” but noted, too, that closure of the southern border would have potential “catastrophic economic impact” on the U.S.

Tuesday’s developments involving Washington’s two top Republicans prompted a statement from Sen. Ted Cruz (R-Tex.), warning that closure of the border would be devastating to Texas and jeopardize the “millions of jobs” that are dependent on trade with Mexico. And while Cruz acknowledged too the need to secure the border, he also pointed out that “the answer is not to punish those who are legally crossing the border.”

On Monday, the border crisis had Homeland Security Secretary Kristjen Nielsen sent additional officers from Customs and Border Protection to the help secure the border.

President Trump made immigration and the southern border a key issue in his 2016 campaign, and his insistence of $5.6 billion in federal funding to erect his U.S.-Mexico border wall resulted in an impasse over funding measures that led to the partial government shutdown that began in December and lasted for 35 days.

On Wednesday, President Trump tweeted: “Congress must get together and immediately eliminate the loopholes at the Border! If no action, Border, or large sections of Border, will close. This is a National Emergency.”

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