A leading expert in the US auto industry has made a worrying prediction: That the entire US auto industry would shut down within one week if President Trump closes the US-Mexican border.
Why might this be the case? Let’s check it out.
Auto Industry Shut Down
It seems to be an extravagant claim but is in actuality a very real possibility. The reason, according to Kristin Dziczek, vice president of industry, labor, and economics at the Center for Automotive Research, is that every automaker in the US depends on imported parts from Mexico.
The expert says that around 37% of all auto parts imported to the United States come from Mexico. In effect, nearly all car models in America have Mexican parts. Because of this relationship, the auto industry would be forced to stop producing vehicles very quickly. Dziczek continues:
“You can’t sell cars with missing pieces […] You’ve got to have them all. I see the whole industry shut down within a week of a border closing.”
Border Closure
As a means to stop illegal immigration, President Trump has threatened to close the US/Mexican border. Though members of his own administration have warned the President of the economic consequences of a shutdown, Trump remains stubborn about his decision. The effects of closing the border have even been described as “catastrophic” by his own team.
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Auto Industry Shut Down
$59.4 billion USD worth of auto parts is imported annually from Mexico. America also exports $32.5 billion worth of parts from vehicle makers and parts from manufacturers to assembly plants in Mexico. Those exports would be greatly affected as well.
According to Matt Blunt, the president of the American Automotive Policy Council:
“Any action that stops commerce at the border would be harmful to the US economy, and in particular, the auto industry […] Access to Mexico’s marketplace and North American integration are critical to operations in the US.”
Do you think Trump will go through with closing the border? Will the auto industry shut down if so?
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