Illegal immigration from Mexico is yesterday’s problem. Last year, more Mexicans left the United States than entered, according to the Pew Research Center.
But if Donald Trump were to follow through on threats to ditch or decimate the North American Free Trade Agreement, illegal immigration from Mexico would become tomorrow’s problem. Just his mouthing off on imports from Mexico has sent the Mexican peso cratering.
That means Mexican products have already become cheaper in the U.S. market, making them more competitive. It also makes crossing the border for jobs paid in U.S. dollars more attractive.
Ah, but won’t that “beautiful” wall keep immigrant workers out? It will not. As long as U.S. employers can get away with hiring cheaper undocumented labor, they will. Trump himself knowingly employed undocumented workers in the building of Trump Tower. They flew over from Poland.
Building a wall along the Mexican border is pure theater. If the objective is to keep terrorists from invading the country in the dead of night, then a wall with Canada would make just as much sense.
Hurting U.S. industries
Trump’s target audience for assaults on free trade, U.S. factory workers, would get little out of strangling trade with Mexico. Automakers and other manufacturers now rely on supply chains whereby their U.S. factories use parts and supplies made in lower-wage countries — and vice versa. This shared manufacturing enables companies to compete in world markets while employing high-paid labor here.
This hasn’t gotten much national attention, but a round of trade wars would visit misery on our farm economy. For example, the U.S. is by far the world’s biggest exporter of corn, much of it headed to Asia and Latin America. Mexico happens to be the third-biggest foreign market for U.S. dairy and meat products.
The National Cattlemen’s Beef Association reported that American cattle producers were losing about $400,000 in sales every day the Trans-Pacific Partnership was not enacted. Trump just killed U.S. participation in that trade agreement. (Its members would have represented about 40 percent of the world’s economy.)
“TPP and NAFTA have long been convenient punching bags,” association president Tracy Brunner complained, “but the reality is that foreign trade has been one of the greatest success stories in the long history of the U.S. beef industry.”
An inescapable political note is that the farm belt overwhelmingly voted for the man who threatened its biggest foreign markets. You can’t blame Trump for this. He never wavered in his hostility to the big trade agreements that have benefited or could greatly benefit U.S. agriculture.
Back at the border, the wall will cost many billions while doing little to solve immigration and security problems. Rather, it will serve as a taxpayer-funded stage set for Trump whenever controversy pays a call and he needs a distraction.
We’d better get used to this sort of thing.
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