Closing the border with Mexico could bring the auto industry to a halt, experts say
Since NAFTA came into force on Jan. 1, 1994, automakers have broadly integrated their U.S., Mexican and Canadian operations. At the same time, Mexico has evolved from an industry backwater to become one of the world’s largest automotive manufacturers. The NAFTA agreement has contributed to that growth, as have the many other free trade agreements the country has negotiated. Low labor costs are the other contributing factor.
Whether Trump will go ahead with the border closure remains to be seen, with reports from the White House indicating some officials are pushing back, warning the president of the potential impact on the U.S. economy. But acting White House chief of staff Mick Mulvaney said on Sunday that heading off that move would require “something dramatic.”
The latest threat comes at a time when the auto industry is struggling to cope with a variety of other Trump trade moves. That includes the tariffs on imported aluminum and steel that, according to both Ford and General Motors, cost them each about $1 billion last year.