With the economy only growing between 2% and 3%, Trump closing the border with Mexico could disrupt the economy so much that it falls into a recession. Investors are not expecting him to follow through since he has cried wolf before, but his off the cuff decisions keep this a wild card.
Trump’s tariffs hurt farmers
In 2018 there was $346 billion in goods imported and $265 billion of goods exported to Mexico. On an average day this is aboutWhile imports and exports are not the only impact on a very complex economy from a border closing, the numbers show that it could be large enough to throw the economy into a recession. However, since the economy is something that Trump is counting on to get him re-elected, shutting down the border would be going against his self-interest.
On a daily basis this is an incremental $1.5 billion in GDP growth, or a bit less than the amount of Goods that the U.S. imports and exports with Mexico every day . Assuming that all trade came to a halt then closing the border could effectively wipe out all of a quarter’s GDP growth, and this is before any other impacts are taken into account.
This would then cause a ripple effect similar to the government shutdown since the stores and restaurants don’t have sales due to unemployed people not visiting. While it could impact the border states the most, it would have an impact across the country.
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