U.S.-Mexico border closure would have immediate effect in Canada: expert
If U.S. President Donald Trump follows through on his threats to close the country’s border with Mexico, Canada will feel the effects immediately, says a Toronto-based trade lawyer.
But Mark Warner doesn’t think any closure would last long.
“I think you’d see the auto companies and auto parts makers try to get into court to get a temporary injunction, which would probably last,” Warner told CTV’s Your Morning Wednesday.
But uncertainty will have an economic effect, he says. Any closure would lead to delays in delivery of agricultural products, such as lettuce, berries and avocados. That would push up prices at the grocery store.
North America’s auto market is heavily integrated, with parts and components crossing both borders multiple times. And in a just-in-time delivery model, parts manufacturers and car makers do not have stock to backfill their supply chains.
“We’ll feel it in Canada but I think the key thing in Canada is to realize that there will be an initial spike and then there will probably be some kind of a temporary injunction and things will calm down for a period,” said Warner. “And that’s the game. We’ve seen the pattern from Trump before and we should be prepared for it.”
Trump warned Friday that he would close the border, or large sections of it, if Mexico did not stop all illegal immigration immediately. He said there is a “very good likelihood” that he would take action this week, emphasizing “I am not kidding around.”
The tension has eased somewhat this week, with Trump saying he is pleased by steps Mexico is taking, although he did not back away from his closure threats. U.S. economic officials say they are examining many options, including keeping truck lanes open for the movement of freight.
Warner expects it would play out much like Trump’s legislation to suspend or severely curtail the entry of refugees from seven countries in early 2017. It was fought in a number of district courts, which granted temporary injunctions. Softened legislation was eventually upheld by the U.S. Supreme Court in June 2018.
According to the federal government, Mexico is Canada’s third most important trading partner, with two-way trade more than CAD $43.3 billion in 2017.
The U.S. and Mexico trade about US $1.7 billion in goods daily, according to the U.S. Chamber of Commerce. It said a border closure would be “an unmitigated economic debacle” that would jeopardize five million U.S. jobs.