President Donald Trump’s top economic advisers are scrambling to impress upon him the potentially dire economic costs of his threat to shut down the U.S.-Mexico border, according to two people familiar with the matter.
Both the White House’s Kevin Hassett and Larry Kudlow have shared economic papers and data with Trump over the last 36 hours, illustrating the way economic growth could slow down even if the president shut down the border for just one day – not to mention the effect on the flow of goods, raw materials, and the U.S. supply chain.
Inside the White House, officials frantically spent the day searching for ways to limit the economic impact of shutting the border, according to two senior administration officials and one Republican close to the White House. One possibility involved closing the border to cars but allowing commercial trucks to continue to pass through. Officials stressed, however, that no final decisions had yet been made.
A White House spokesperson did not respond to a request for comment.
Trump did not seem swayed by his advisers’ economic arguments. “Sure, it will have a negative effect on the economy,” Trump told reporters in the Oval Office on Tuesday afternoon. “But to me, trading is very important, the borders are very important, but security is what is most important. I mean, we have to have security.”
Republican Party leaders do not share Trump’s view. Senate Majority Leader Mitch McConnell said Tuesday that closing the border would potentially be “catastrophic” and that while he agrees there is a crisis at the border, shutting down the border is not the answer.
“Closing down the border would have potentially catastrophic economic impact on our country and I would hope we would not be doing that,” McConnell said.
Trump’s threat to close the southern border also set off a panic among influential business groups in Washington, which have scrambled to publicly underline the economic stakes of such a move in hopes of convincing the president to back down.
“You have a lot of people who are freaking out over this,” said an executive at a prominent industry group who wasn’t authorized to speak on the record, adding that shuttering the border would result in an unprecedented blow to the economy.
The U.S. Chamber of Commerce, National Association of Manufacturers and the American Automotive Policy Council, which represents Ford and General Motors, have all warned in recent days of dire consequences if Trump pulls the trigger.
NAM, which has nurtured close ties to the White House, said Tuesday that businesses stand to lose $726 million for every day the border is closed.
The U.S. auto industry is particularly concerned, facing not only the prospect of a border closure, which would limit the import of essential automobile parts, but also potential tariffs on the imports of foreign cars.
“Within a week, we’d have most of the U.S. auto industry shutdown,” said Kristin Dziczek, an expert on the economics of the auto industry at the Center for Automotive Research, a non-profit think tank based in Michigan.
“Everybody is on board that this would be very devastating. It’s not an industry that you can turn the switch on and off and no damage would be done. It’s not a light switch,” she added, warning that it could contribute to an economic downturn. “Economic recoveries don’t die of old age, they die of policy mistakes. And this is the biggest mistake I can think of.”
Senior officials at Trump-aligned outside industry groups have also privately reached out directly to the White House to stress their concerns, according to a person familiar with the matter. They’ve encouraged White House officials to make the case directly to the president that a border closure could undermine the positive economic headwinds that will be so central to Trump’s reelection message.
Administration officials insisted on Tuesday that the president remains serious about closing the border, though they said he hasn’t made a final decision.
“Our system is absolutely maxed out,” Trump said. “It’s a very unfair thing.”
The president put the onus on Congress to reach an immigration deal. “If we don’t make a deal with Congress, the border’s going to be closed, 100 percent,” he said on Tuesday afternoon.
White House press secretary Sarah Huckabee Sanders also expressed those concerns earlier Tuesday.
“This isn’t our first choice,” Sanders told reporters outside the White House. “Our first choice would be for Democrats to actually sit down with us and help fix a broken system to address the national security and humanitarian crisis that exists at our border.”
Article originally published on POLITICO Magazine