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Tuesday, 09 April 2019 23:22

Auto Industry: Blocking Trade With Mexico Would Be Disruptive

Written by Nora Naughton, The Detroit News

Index

 

As President Donald Trump threatens to close the U.S.-Mexico border in an attempt to curb illegal immigration, some in the U.S. auto industry are warning the move could cause major disruptions.

 

Trump told reporters March 29 he "could" close the U.S.-Mexican border to "all trade" as part of a larger effort to force Mexico to crack down on immigration from Central American countries.

 

“If they don’t stop them, we are closing the border," Trump said. "We’ll close it. And we’ll keep it closed for a long time. I’m not playing games."

 

The Alliance of Automobile Manufacturers, a Washington-based group that lobbies for most major automakers, pushed back April 1 against any closure to trade.

 

"Automakers rely heavily on cross-border trade throughout the North American region," the alliance said in a statement. "In many instances, auto parts can cross the border seven to eight times before being integrated into the final assembly of a vehicle.

 

"We urge all parties to work together to avert a border closing that would result in significant disruptions to the North American auto industry, because ultimately increased costs hurt customers."

 

Some 37 percent of all auto parts imported to the U.S. come from Mexico, the country's third-largest trading partner. Cutting off U.S.-Mexican trade could create a ripple effect in the industry that wouldn't just slow or stop the delivery of vehicles---it could shut down entire plants in the United States.

 

"Building a vehicle becomes very difficult if you don't have all the pieces to make it work," said Kristin Dziczek, vice president of Ann Arbor-based Center for Automotive Research. "Depending on how long a closure lasts, there could be some vehicle shortages. But the more immediate effect is shutting down U.S. plants."

 

In Michigan alone, some five plants stand to be affected if trade between the U.S. and Mexico is brought to a standstill.

 

Among the most vulnerable are Fiat Chrysler Automobiles' Warren Truck and Jefferson North Assembly plants, and General Motors Co.'s Flint Truck plant, according to data provided by the Center for Automotive Research. Those three Michigan plants all source engines from plants in Mexico.


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