US-Mexico Border Delays Hit Auto Industry
By Mark Vickery – Senior Editor, Zacks
April 09, 2019 – The U.S. auto industry braces for impact this morning, as auto parts shipments through the U.S.-Mexico border are currently experiencing “serious delays” into our country. The integrated North American auto industry — where parts often cross the border several times before finally being installed in an automobile — is now threatened by policy shifts for the business of automakers and suppliers on both sides of the border.
U.S. Auto Industry Generates $ 1 Billion in Trade Daily
This industry generates $1.7 billion in trade per day, but gridlock has reduced by half the number of shipments reaching their destinations. Popular pickup truck brands like the Chevy Silverado and Fiat Chrysler’s Ram trucks are among those to be most deeply affected.
The Trump administration has transferred 750 border agents away from commercial processing to deal with growing immigration realities at the southern border, where a new influx of families prepare to cross into the U.S. from various troubled countries in Central and South America. While immigration from our neighbors to the south had subsided in recent years, these numbers are expected to spike up in 2019.
2.6 Million Autos Exported to US from Mexico in 2018
Last year, 2.6 million autos were exported from Mexico to the U.S. — the best year ever for this integrated industry. Now, gridlock threatens the businesses of not only the big auto companies, but parts suppliers and car dealerships, as well.
The White House has also set its sights on imposing new tariffs on European goods imported to the U.S. such as wine, cheese and things like passenger helicopters. This is in response to what the administration feels are “unfair” subsidies to airplane manufacturer Airbus, the main competitor of U.S.-based Boeing
$11 Billion in EU Goods May be Affected by Tariffs
Approximately $11 billion in goods from the European Union (EU) is reportedly expected to be affected by tariffs. The U.S. Trade Rep awaits a ruling by the World Trade Organization (WTO) this summer. These tariffs appear to follow similar trade policy the Trump administration has implemented with Chinese trade, which has led to tensions that have affected economies both in China and the U.S. since last autumn.