Concern about world trade and tariffs are mounting and there is currently a major focus on the U.S./Mexican border for a number of reasons.
Ratification of the revised trade agreement between the U.S., Mexico and Canada is still pending and its passage is not considered a slam dunk at this point. It is not clear what the Administration will do in an effort to push it through. There was some talk earlier about a plan to simply cancel NAFTA as a way to force Congress to act which tapered off. This needs to be watched closely.
Secondly, the President recently threatened to close the southern border if Latin American countries did not stop the wave of immigrants that has stretched the capabilities of ICE and border patrol agents to handle. This would severely hurt the economies of both countries and the President has pulled back from this position, announcing today he would not close the border to both passenger and truck traffic.
This week Customs and Border Protection has reallocated resources to respond further to the capacity issues to address people attempting to cross the border. CBP has reassigned up to 750 officers to assist Border Patrol staff in dealing with the people issues. One impact of this has been a slowdown in the processing of import cargo coming from Mexico.
Truck lines are growing at Laredo, TX, the largest southern border crossing. According to the Laredo customs brokers association the number of trucks crossing is down almost 4,000 loads a day, approximately 40%. Some smaller CBP ports of entry, like facilities at Nogales, AZ and Eagle Pass, TX, have announced they will be closed on weekends. CBP at El Paso, TX announced that its Bridge of Americas import lot will be closed on Sundays until further notice.
Any shippers that rely on Mexican goods and materials should bear this in mind as disruptions are occurring now and, given the massive amount of trade we do with Mexico, it will not take too long for these delays to be felt in a wide variety of U.S. industries and retail trades. We will continue to monitor this and keep you advised.