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Texas May Have Ruined America’s Supply Chain

Texas May Have Ruined America’s Supply Chain
Border inspection crackdown resulted in supply chain delays.
  • Post category:news

Governor Abbot’s week-long protest against Biden’s immigration policy finally ended. However, the long-term effects may cripple the US economy for months, or even years. Mexico supplies the United States with everything from avocados to auto parts. Many companies see Mexico as an alternative to China for goods and labor. Governor Abbot’s border inspection crackdown has many companies second-guessing their arrangements with Mexico. The inspection crackdown called for a thorough inspection of every commercial truck that crossed the border. These inspections created supply chain delays and millions of dollars of spoiled produce.

Texas Agriculture Commissioner Sid Miller called the crackdowns “political theater”. The intention of this crackdown was simple. Inspect the commercial trucks for any drugs or illegal immigrants. Abbot’s show didn’t find any drugs or illegal immigrants, but what they did find was truckloads of rotten produce that didn’t make it across the border in time. Mexico imports around $9 billion of produce through the Texas-Mexico border each year. Many truckers noted that the border crossing took them nearly 30 hours to complete. The one-week crackdown may take at least 3 weeks before the trucking schedule is back on track.

But 3 weeks is conservative, and that just means deliveries will arrive on time. This doesn’t include the lost inventory destroyed or delayed during the crackdown. America is in the middle of an inflation surge and the global supply chain is running on empty due to the pandemic. All of this puts Abbot’s crackdown in the eye of a storm that America will have to dig itself out of.

How the crackdowns affect America’s Supply Chain

Fruit and vegetable producers lost roughly $240 million during the crackdown. Folks in Texas communities like Austin will see a short supply of produce in their stores first, but then the rest of the country will as well. This will lead to surge pricing. The biggest problem with surge pricing is that once companies realize consumers will pay extra, they rarely lower the prices back to normal. But produce isn’t the only thing that Mexico imports.

Beer suppliers are telling their buyers that there may be shortages due to glass shipments that never came. Manufacturers rely on parts from Mexico and, with the delay of shipments, we could see a delay in many projects. Companies that once saw Mexico as an alternative to doing business with China are rethinking their choice. They don’t want to entrust their business if their supply chain can be broken so easily.

Governor Abbot has some explaining to do, but so far, he isn’t backing down from his position. In fact, he has threatened to call for another crackdown if Mexican governors don’t follow through with their promises. The issue is that border checkpoints are hardly where illegal immigrants and drugs get smuggled in. The illegal trade industry is a billion-dollar industry that doesn’t take risks through federal and state checkpoints. Instead, they use mountain and desert passes far removed from the border checkpoints.

The Biden administration is still looking into how this crackdown affects America and has yet to officially weigh in. What is certain is that Governor Abbot is up for reelection this November. Only time will tell how Texans react to this. The governor won his election on the platform that he would crack down on the borders. However, once Texas residents feel the results in their pocket books, they may have another candidate in mind for this year’s election.

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