The Risks in Trump’s Border Threats: Credibility for America, Instability for Business

When President Donald Trump threatened to shut down the U.S.-Mexico border, many felt a sense of déjà vu.Once again, he was pledging to create havoc if he didn’t get what he wanted, and the American public was promptly warned about the chance of running out of avocados and shutting down auto assembly lines.Not to worry. Our supplies of fruits, vegetables and auto parts appear secure for now. Within a week, Trump revised his threat and gave Mexico a “one-year warning” to curb the flow of immigrants and drugs.If that fails, he said, he’ll try auto tariffs and then shut down the border if necessary.If this all seems familiar, maybe it’s because we covered the same territory after the president said the U.S. would abandon the North American Free Trade Agreement.That calamity was avoided, in part because companies, citizens and national and local leaders rallied to the defense of free trade. At the same time, negotiators for the U.S., Mexico and Canada hammered out an updated pact that has some new protections for workers but will have “a negligible effect” on output, according to a recent working paper.A similar story may emerge on closing the border. Business groups have sent letters to Washington and pushed elected officials to lobby the White House, and they’ve documented the economic destruction that would follow such an unprecedented move.  Continue reading...