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Trump dials back Mexico border threat as industry warns of fallout

WASHINGTON — President Donald Trump took a step back on Tuesday from his threat to close the U.S. southern border to fight illegal immigration, as pressure mounted from companies worried that a shutdown would cause chaos to supply chains.

Trump threatened on Friday to close the border this week unless Mexico acted. He repeated that threat on Tuesday but said he had not made a decision yet.

"Let me just give you a little secret: Security is more important to me than trade," Trump said at the White House. "I'm totally prepared to do it. We're going to see what happens over the next few days."

Closing the border could disrupt millions of legal crossings and billions of dollars in trade. Auto companies have been warning the White House privately that it would lead to the idling of U.S. plants within days because they rely on prompt deliveries of components made in Mexico.

"You can't build an auto without all the parts," said Kristin Dziczek, a vice president of the Center for Automotive Research in Ann Arbor, Michigan. "Within a shift or two we would start to see some parts shortages, and some of those parts are so mission critical we would see the entire industry shut down within a week or so."

A typical vehicle is assembled from 30,000 parts and Mexico is the largest source of foreign components for U.S. manufacturers, who have geared their production to lean inventories and just-in-time delivery. Seats, for example, often go back and forth across the border several times as they are produced in stages, said Charlie Chesbrough, a senior economist with Cox Automotive Inc., an Atlanta-based research and marketing company.

"I don't see how the industry can react in any way," Chesbrough said. "You need very specific parts to go into a vehicle."

Even if the administration decides to exempt auto parts from a border closing, that would be difficult to do in practice, Dziczek said. Late Tuesday, Trump economic adviser Larry Kudlow said the administration was considering ways to limit damage, telling CNBC one idea might be to find ways to allow freight across the border to "ameliorate the breakdown in supply chains."

The Chamber of Commerce, the largest U.S. business lobbying group, has been in contact with the White House to discuss the "very negative economic consequences that would occur across the country," said Neil Bradley, the group's top lobbyist, on a call with reporters.

Trump praised efforts by Mexico to hinder illegal immigration from Central America at its own southern border. On Monday, the Mexican government said it would help regulate the flow of migrants.

"I really wanted to close it," Trump said Tuesday night at a fundraiser for congressional Republicans.

The Mexican government has not published apprehension statistics, but a senior White House official said it had provided daily updates to the Trump administration, including specific apprehension numbers.

"They say they're going to stop them. Let's see. They have the power to stop them, they have the laws to stop them," Trump said earlier on Tuesday.

Trump has made fighting illegal immigration from Mexico and Central America a key part of his agenda, but shutting down one of the world's most used borders might be a step too far, even for many of his fellow Republicans.

Republican Senate Majority Leader Mitch McConnell joined Democrats in warning Trump against such a move.

"Closing down the border would have potentially catastrophic economic impact on our country and I would hope we would not be doing that sort of thing," McConnell told reporters on Tuesday.

A group representing General Motors, Ford Motor Co. and Fiat Chrysler Automobiles said in a statement that "any action that stops commerce at the border would be harmful to the U.S. economy, and in particular, the auto industry."

Dozens of U.S. vehicle, engine, transmission and other auto parts plants could close because of a lack of components in the days after a border shutdown. It would also prevent thousands of vehicles built in Mexico from landing in U.S. dealer showrooms.

Automakers exported nearly 2.6 million Mexican-made vehicles to the United States in 2018, accounting for 15 percent of all vehicles sold in the country. Some, like the Chevrolet Blazer, are made only in Mexico.

Retailers are also raising alarm bells, according to officials with two groups that represent hundreds of U.S. retail firms.

"It will be unprecedented self-inflicted pain," said David French, senior vice president of government relations at the National Retail Federation. "We are still nervous about this and we have been talking to some of our companies about maybe ramping up direct pressure on the White House by getting CEOs to call."

Senior U.S. Department of Homeland Security officials said on Tuesday a recent redeployment of some 750 officers on the border to deal with a surge in migrants — mostly Central American families turning themselves in to border agents — had already led to a slowing of legal crossings and commerce at ports of entry.

"Wait times in Brownsville [Texas] were around 180 minutes, which were two times the peaks of last year," said a senior DHS official on a call with reporters. "We ended the day yesterday at Otay Mesa [California] with a backup of 150 trucks that hadn't been processed," the official said.

Mexican Foreign Minister Marcelo Ebrard said on Tuesday that backups were delaying commercial traffic at the U.S.-Mexico border at several crossings. He said the government had not drastically changed its migration strategy following the shutdown threats.

DHS officials said border facilities had been overwhelmed by families seeking asylum, fleeing poverty and violence in Central America.

DHS Secretary Kirstjen Nielsen said Manuel Padilla, a 30-year veteran of the U.S. Border Patrol, would now serve as the agency's coordinator on the border response.

U.S. Customs and Border Protection estimated that some 100,000 migrants were apprehended or encountered at the border in March, the highest level in a decade. "The system is on fire," a DHS official said.

Because of limits on how long children are legally allowed to be held in detention, many of the families are released to await U.S. immigration court hearings, a process that can take years because of ballooning backlogs.

To try to address the problem, the Trump administration in January started sending some migrants to wait out their U.S. court dates in Mexican border cities. On Monday, DHS said it would dramatically ramp up that program, despite court challenges.

The biggest priority for Nielsen is to seek action from Congress to change the immigration laws, said a DHS official. She sent a letter to Congress last week repeating many of the Trump administration's demands, including a request to quickly deport Central American minors that cross the border alone.

Under current law, minors who are not from the contiguous countries of Canada and Mexico are placed in the care of sponsors in the United States, which Nielsen called a "dangerous 'pull' factor" for migrants. Migrant advocates and some Democrats in Congress oppose the proposed legislative changes, saying they would send vulnerable children back to dangerous situations in their home countries.

Trump said he had spoken with "a few" Democrats on Tuesday about the administration's proposals and added: "They're changing their minds."

Reuters and Bloomberg contributed to this report.

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