The dangerous economics of a militarized border

Despite the end of the government shutdown, President Trump has alleged that a $5 billion steel barrier is necessary to safeguard U.S. national security by stopping the flow of unauthorized migration and drugs. The latest political brinksmanship hurt federal employees by withholding pay and added delays for asylum seekers. He reiterated this claim in his State of the Union address on Tuesday. But despite his alleged business acumen, President Trump's zero-sum calculus has also had another victim: small businesses.

For months now, Trump's immigration policies have endangered small business owners across the southern border. Both larger retail chains and mom and pop shops rely heavily on the churn of cross-border consumerism. But closed lanes, army exercises, and entire port shutdowns discourage would-be shoppers from crossing over to the United States since it adds uncertainty not just for the time it will take to cross over but if they will be able to get back.

Nowhere is this more evident than in the small city of Nogales, Arizona. With a population of 20,000 people, downtown Nogales caters more to their Mexican neighbors just south of the border than to its U.S.-based residents. At 220,000, Nogales, Sonora is the larger sister city of Nogales, Arizona. Locals affectionately call the two cities "Ambos Nogales" and embrace one another as a single binational community where people and vehicles flow with ease. According to the Department of Transportation (DOT), an average of 3,400 people crossed every day in 2017, meaning nearly 400 per hour.

While transit occurs year round, the holiday rush of both Mexican and American shoppers is particularly important. Since 2010, DOT data confirms that December stands out as one of the busier months of the year. Indeed, while an average of 330,000 pedestrians crossed each month in 2017, well over 400,000 crossed in December. Although retailers rely on this shopping boost, another institution also banks on this revenue: the City of Nogales. According to Nogales USA, nearly 60 percent of the city's tax revenue is generated by Mexican shoppers visiting retail stores where they shell out their disposable income on electronics, clothing, and shoes.

Although many U.S. border towns like Nogales thrive on retail shopping and trade, the harsh immigration rhetoric and military presence have sent ripples through a community already reeling from the economic impacts of tightened border security.

For more than 20 years, Nogales has had a steel barrier along the international line, and the post 9/11-world ushered in more restrictions. In 2009, the Western Hemisphere Travel Initiative tightened visa requirements, decreasing foot traffic by nearly 40 percent at the Nogales Port of Entry. The decrease shuttered businesses along Morley Ave with shops no longer generating enough income to stay open.

Beyong consumer traffic, the port also acts as the primary import hub for agricultural produce into the United States. Over four billion pounds of fruits and vegetables cross the Mariposa entrance every year. The Fresh Produce Association of the Americas, formed in Nogales in 1944 to facilitate this cross-border commerce, claimed that Mexico represents nearly 40 percent of U.S. fruit and vegetable imports. As the largest agricultural port, Nogales values its trade commerce at $3 billion per year. Delays hurt businesses that rely on tight time frames, increasing costs and risking spoiling the produce.

During the past six months, the Trump administration has exacerbated the situation.

In early November, President Trump deployed over 5,000 active duty U.S. troops to border cities to prepare for the arrival of the migrant caravan, which he described as "an invasion to our country." In Nogales, troops were accompanied by an additional 2,000 National Guard troops. Soon after their arrival, U.S. soldiers installed coiled concertina wire along areas of downtown Nogales, which they have continued to increase over the following weeks.

Perhaps more damaging still, however, are the shuttered lanes and readiness exercises performed with increasing frequency. U.S. troops closed two of six traffic lanes at the DeConcini Entrance in early November, blocking them with steel containers lined with concertina wire. On December 4, Tucson News Now reported that CBP agents and U.S. soldiers jointly performed readiness exercises to prepare for the arrival of the migrant caravan. There were reported crossing delays, and wait times exceed an hour for vehicles.

Trump has also repeatedly threatened to close the entire U.S. - Mexico border during the shutdown standoff. But what would happen if the Nogales Port of Entry closed entirely? In November, pedestrians and visa holders in San Ysidro, California experienced that reality firsthand. After a complete closure, the San Ysidro Regional Chamber of Commerce reported that the Port of Entry lost nearly $5 million that day. A perfume wholesaler on the San Ysidro side complained that his business had seen a sharp downturn with the reduced pedestrian traffic crossing the border. With nearly 50 percent of the San Ysidro workforce residing on the Mexican side, port closures impact productivity.

More policies that lengthen wait times for border crossers spell disaster for trade associations and border towns that tie their budgets to expected tax revenue from cross-border shoppers or cross border commerce. As President Trump pushes his proposed border wall and militarizes U.S. ports of entry, business owners will continue to suffer. Rather than sending more U.S. Army troops to the border, the administration would better serve border communities by hiring more CBP officers at ports of entry, re-opening traffic lanes, and upgrading key ports like Nogales. After all, businesses are counting on it.