San Antonio Express-News (Sunday)
Valley fears threat to shut the border
MISSION — Alpha XL Mold and Tool, the Guerrero family’s small but bustling plastic-mold injection shop, sits on a street that’s part neighborhood, part industrial zone. The air is fragrant with emissions from a nearby citrus-juice plant.
The business founded by Julio Guerrero is near one of the many thriving industrial parks along the Texas-Mexico border.
Orders come in from maquilado
ras, or assembly plants, a few miles across the Rio Grande in Reynosa — for steering-wheel casings for a French automotive company, drill moldings for a major U.S. power tool maker, tiny suture wings for a multinational medical supplier.
Engineers fashion designs on computers, graphite drills carve steel into patterns and giant machines running on complicated software code precision-cut sheets of metal.
Proximity is key for Alpha XL. Guerrero’s employees can make modifications in a few days and deliver the products to assembly lines working nonstop to fill orders from
across the globe. With 10 employees, the company is a tiny player in the frenetic world of cross-border commerce.
President Donald Trump’s recent threat to close the border puts his business at risk and jeopardizes the jobs of thousands of workers on both sides of the border.
Suddenly, Guerrero finds himself in the middle of a struggle between national security, as Trump defines it, and the transnational free trade on which he’s staked his family’s future. He moved to Mission from North Carolina because of factory closings there.
“The economy is actually binational in South Texas,” said Guerrero, who holds dual U.S.-Mexican citizenship. “There’s lots of businesses now that depend on each other either way. Businesses in Reynosa depend on the U.S., and U.S. businesses depend on Mexican.”
The possibility of sealing the border had been unthinkable — until Trump ordered the hourslong shutdown of the San Ysidro crossing linking San Diego, Calif., with Tijuana, Mexico.
U.S. Customs and Border Protection closed the crossing on Nov. 25 after members of a Central American migrant caravan, many of them fleeing their native Honduras, rushed a barrier.
Trump has said he’s not afraid to close the nearly 2,000 - mile border, which stretches from Brownsville to San Diego, “for a long time” if need be to stop immigrants from crossing illegally into the United States.
Slowing to crawl
For Guerrero and many others, these are some of the routine sights: long lines of northbound semi-trailers approaching the Pharr-Reynosa International Bridge; Mexican families wheeling the day’s load of McAllen shopping into area hotels; truck traffic at refrigerated produce sheds storing tomatoes, avocados and peppers bound for supermarkets across the United States.
It’s common for maquiladora managers to live on the U.S. side and cross into Mexico daily for work.
Commerce is at the heart of life on the border.
Mexican shoppers, for example, account for 30 to 40 percent of McAllen’s retail sales, according to the Federal Reserve Bank of Dallas.
Richard Cortez, a former McAllen mayor who’s now county judge-elect for Hidalgo County, said he was dumbstruck when he heard Trump’s threat.
“To me,” he said, “even thinking about doing that is just idiotic — it’s just crazy.”
More than $1 million worth of trade crosses the Southern U.S. border every minute, say researchers at Texas A&M International University in Laredo. Some $650 billion in trade came through Texas ports in 2015, directly or indirectly supporting nearly 1.6 million Texas jobs and adding $224.3 billion to the gross state product, the state comptroller’s office reports.
It’s hard to know what to expect from a border closure because there have been so few of them.
The closest the federal government came in recent memory was after the 9/11 attacks — and even that fell short of a border closure. After President George W. Bush declared a “Level 1 Alert,” customs officers searched every vehicle crossing into the United States. Trade slowed to a crawl. The city of San Diego declared an economic emergency.
There was a similar crisis when President Ronald Reagan ordered closer inspections after DEA Agent Enrique “Kiki” Camarena Salazar was kidnapped on assignment in Guadalajara, Mexico. Traffic on both sides of the border backed up seven hours or more.
Gerald Schwebel, executive vice president of the Laredobased International Bank of Commerce, said he couldn’t recall anything like what Trump has proposed. To the contrary, when Laredo’s World Trade Bridge was damaged by high winds last year, repairing the damage as quickly as possible was a top priority, Schwebel said.
Last month’s brief closure of a single crossing point opened only a small window on what to expect from a full-scale border closure.
The five-hour shutdown in San Diego cost an estimated $5.3 million in lost trade, based on spending data tracked by the San Ysidro Chamber of Commerce. Paola Avila, head of both the borderwide Border Trade Alliance and San Diego Chamber of Commerce, said it took Customs and Border Patrol three hours to get everything back online once the decision was made to reopen the crossing.
Free traders on edge
Talk of a sudden shutdown has people on both sides of the border — who regularly travel back and forth — fearful of getting stuck in the other country.
“Social media is all over the place creating panic with Mexican visitors during this holiday season,” Schwebel said. “We cannot take this lightly. Ask Walmart, Amazon, FedEx, UPS, H-E-B what closing the border for one day would cost them. … Can’t play games with this.”
Keith Patridge, president of the McAllen Economic Development Corp., said companies have been calling him frantically, asking exactly what shutting down the border would entail. He tells them he’s not sure.
“We’re really kind of in uncharted waters, I guess, because the actual idea of closing the bor- der is a relatively new concept,” Patridge said “I know it’s possible, because they just did it down in San Ysidro.”
While manufacturers think talk of a prolonged shutdown is mostly hot air, he said many are stockpiling both raw materials and finished products just in case.
“If you can’t deliver your product to an automotive plant somewhere in the U.S. and you shut down your production, it could cost you $750,000 to $800,000 an hour for every hour that the assembly line is not running,” he said. “They’re now looking at, ‘Well, I’m increasing my stock of finished goods, I’m increasing my stock of component parts on both sides of the border so that I can keep my plant running.’ Which is an increased cost, which is disrupting the normal flow of production.”
Whether or not it sways Trump, CBP has been getting an earful about the potential trade losses.
Avila said representatives of produce suppliers and other industries have spoken with members of CBP’s trade division about ways to mitigate the enormous costs related to closing the border — everything from fruit rotting in storage facilities to factories not receiving the parts they need to assemble automobiles and electronics.
CBP “requested the call to get some more information — detailed information about the economic risks — because they are interested in that,” she said. “CBP’s tasked with both border security and border facilitation.”
A CBP spokesperson confirmed the agency “has been in communication with our stakeholders on our contingency planning.”
“CBP, they have operated the ports for years. They know the amount of commerce that goes through there. They understand the importance,” Avila said. “Now whether the White House understands, I’m not sure.”
Border communities aren’t the only ones on edge.
The fight to keep the United States from withdrawing from the trilateral North American Free Trade Agreement became a national one when nonborder states realized how dependent they were on duty-free imports and exports to Mexico and Canada.
Manufacturers constantly are moving parts and finished products back and forth, and Mexico is a huge market for U.S. agricultural goods such as corn, soybeans, pork and dairy products.
In a backhanded way, the titfor-tat trade tariffs sparked by Trump have highlighted that reality. In response to U.S. tariffs on aluminum and steel, Mexico imposed heavy duties on products like bourbon from Kentucky, pork from Iowa and nails from Missouri.
“There are actions that Mexico is taking that are laser-focused on certain congressional districts, certain states of the U.S. that have a lot to lose,” said Wolfram Schaffler Gonzalez of Texas A&M International University’s Texas Center for Border Economic and Enterprise Development. “There is not a single state that does not benefit in one way or another from trade with Mexico.”
Dependent on trade
Nevertheless, the worries are more acute — and the threat of economic damage from a border closure more pointed — among South Texas residents and business people.
It’s tiring to be on the border and caught in both a trade war
and battles over immigration policy, said Monica Weisberg-Stewart, a McAllen business owner who is immigration and border security chairwoman for the Texas Border Coalition.
Border-crossing facilities and staffing — including inspectors — still hasn’t caught up with the tighter, post-9/11 security, she said. The Rio Grande Valley has been ground zero for the recent surge of unaccompanied minors crossing into this country, much as it was during a surge of Brazilian immigrants under President George W. Bush.
“We do agree with the president that Congress has got to get this solved on immigration reform, because behind one group of individuals that’s coming is another group and another group and another group,” WeisbergStewart said. “We hate seeing the financial security of our county being jeopardized because Congress can’t get the laws in place.”
Back at the mold shop, Felix Guerrero, Julio Guerrero’s son, said most Americans don’t understand how dependent they are on so-called borderplexes such as the lower Rio Grande Valley.
A whole industry has risen to haul fruits and vegetables north, and beef, poultry, milk and grains south. Countless truck drivers have pulled trailer-loads up Interstate 35 from Laredo to Minnesota. Automotive plants around the country roll out cars, trucks and SUVs made with electronics and other parts that may have crossed the border several times.
Reynosa has become a huge hub for medical supplies bound for emergency rooms and doctors’ offices across the United States.
“They say, ‘Oh, well, we can bring that (manufacturing process) back to the U.S.’ But that quickly?,” Felix Guerrero said. “I promise you, there’s somebody right now in a hospital waiting for components — things that we process and make every day that they needed probably yesterday.”
“Even thinking about doing that is just idiotic — it’s just crazy.”
Hidalgo County Judge-elect Richard Cortez, talking about President Trump’s threats to shut down the border