Editorial: Automakers shouldn't pay price for border fight
Detroit's automakers don't need any more help from President Donald Trump. The administration has kept the industry in almost perpetual turmoil, and another rash threat from the president to close the border with Mexico to all trade and traffic threatens to roil it again.
Trump declared earlier this week that he might cut off all trade with Mexico if that country doesn't actively deter illegal immigration.
Whether the president was serious is hard to tell. But automakers have seen so much that they didn't expect from this administration that they have to take everything Trump says seriously.
More than one-third of auto parts imported to the U.S. come from Mexico. Without those parts, many of this nation's auto plants would have to shut down. In Michigan, five assembly plants would likely be brought to a standstill if Mexican engines and other components are held at the border.
The auto industry accounts for 3.5 percent of the American economy, and more than 7 million jobs. If it goes down for an extended period of time, a national recession would be almost guaranteed.
Trump has already driven up costs and throttled employment growth in the industry with his ill-conceived tariffs on steel and aluminum and broader levies on goods from China. More than 60 percent of auto-related companies reported at the end of last year that the tariffs resulted in higher costs and lower profits and employment.
Yet the administration is weighting additional levies on imported cars and parts. A decision is expected from the president by next month.
Automakers have postponed investment because of the uncertainty created by the tariffs and the scrapping of the North American Free Trade Agreement (NAFTA). A replacement for NAFTA has been negotiated, but there's no indication that it will move through Congress anytime soon.
There's also considerable uneasiness in the industry because the White House has not sent a clear signal on future emissions and mileage standards. That makes product and manufacturing planning much more difficult.
Adding a border closure would be more than automakers could bear. An industry that has helped lead America out of the Great Recession over the past decade could easily lead it into another economic downturn, this one created by bad policy.
Trump's instinct is to use out-sized threats to force Mexico to cooperate on border security and Democrats to give him a border wall.
But the biggest threat is to the American economy and its auto industry, which are bearing the brunt of the president's temperamental policy-making.