Trump Threatens To Crash Economy If He Doesn’t Receive Border Wall Money

Though President Trump said closing the border would financially benefit the U.S. economy, it would do no such thing.

President Donald Trump issued an ultimatum to Democrats via Twitter on Friday morning: hand over full funding for his wall or he will close the southern U.S. border, in what he called a “profit making operation.”

In reality, shutting down the border with Mexico would wreak havoc on the economy.

Via New York Magazine:

On Friday morning, the president tweeted that if Democrats refuse to fund his wall, he will engineer a massive recession (that would all but insure Democratic victory in 2020) — because he is under the impression that the United States would “profit” by closing its southern border to all commerce, since the U.S. runs a trade deficit with Mexico:

The President of the United States has threatened to cease all the U.S. and its third largest trading partner, and he views this as a move that would line America’s pockets with newfound cash.

What would closing the border do in reality?

Upward of $30 billion worth of goods are shipped across the U.S. southern border on a monthly basis; interrupting that flow of goods for any significant period of time would paralyze major corporate supply chains, drive countless small businesses into insolvency, and terrorize global markets with the specter of American autarky.

For these reasons, it is unlikely that Trump’s tweets are little more than an empty threat designed to pressure congressional Democrats into delivering the spending bill he has ordered.

New York Magazine noted that investors seem to be operating on this assumption, as the Dow Jones and S&P 500 were up in early trading Friday.

But it is not outside the realm of possibility that Trump would actually act upon such a harebrained idea, either.

And yet, “Trump would never do X because that would be stupid and politically counterproductive” isn’t the world’s most reliable heuristic. After all, the current (partial) government shutdown is itself the product of the president deciding that he could secure leverage over congressional Democrats by doing something stupid and politically counterproductive.

Bottom line?

Trump’s threat to “close the border” appears to be a desperate attempt to secure some kind of leverage over negotiating partners who show no signs of caving. And it is (arguably) true that the president could at least temporarily shutter the U.S.-Mexico border by invoking his national security powers, and that this would inflict some economic pain on Democratic constituencies.