Mexico border delays weigh on US investment, factories

Bloomberg

More cargo from Mexico to the US is being held up at the border, accompanied by increasing evidence that such delays are dimming prospects for American companies.
Slower trade between the countries since federal border officers were recently redirected to deal with a surge in migrants has been socking businesses with additional shipping costs. The effects will likely cause a modest headwind for second-quarter non-residential investment growth — which cooled at the start of the year — and already helped to push a US factory gauge to a two-year low in April, according to Bank of America Corp.
“The delays generate a meaningful direct cost for businesses,” economist Step-hen Juneau said in an email. The disruption may have a significant impact on the
flow of goods, as more than 86 percent of Mexican imports enter the US by land, and impose some $5.5 million in additional costs on US businesses each month, he wrote in a report.
Trucking company Werner Enterprises Inc. said on an earnings call that it expects border crossing to be “slow for the foreseeable future.”
“Freight is still crossing the border at a very slow rate by comparable standards,” said Derek Leathers, chief executive officer of the Omaha,
Nebraska-based company.
US Customs and Border Protection said that trade processing would slow, with as many as 750 officers from crossings in the San Diego, Tucson, El Paso and Laredo regions being re-assigned. President Donald Trump the next day renewed threats to close the border.
The Institute for Supply Management’s factory survey showed April conditions at weakest since October 2016, though still expansionary.