On March 18, 2020, former President Donald Trump announced on Twitter that the border between the United States and Canada would temporarily be closed in an effort to curb the spread of the coronavirus, noting that trade would not be affected. The temporary travel restrictions between both the northern and southern border of the United States went into full effect shortly after on March 21, 2020, limiting all non-essential travel.¹ This caused a reduction of cross border activity and an increase of supply and demand shocks as many non-essential jobs were laid off and personnel left their jobs. The demand of goods and services increased while suppliers where barely able to keep up with these demands. The original measures were extended every 30 days as border control and travel restrictions were thought to “remain critical to slowing the spread and allowing the phased opening of the country”², lasting for a total of 18 months.

To understand the border closures, the Department of Homeland Security and the U.S. Customs and Border Protection Agency provided travelers with guides to distinguish between essential and non-essential travel. According to the Homeland Security, “non-essential” travel is that which is considered tourism or recreational in nature, while “essential” travel included U.S. citizens and lawful permanent residents returning to the United States, individuals traveling to attend educational institutions or to work, individuals traveling for emergency response and public health purposes, individuals engaged in lawful cross-border trade, individuals engaged in military-related travel or operations, and other.³ Additionally, the travel bans did not extend to essential trade or travel and commerce. The distinction between travel created a unique situation at the border as only some individuals were allowed to travel in and out of the country without restrictions.

Before the closure of border, researchers studied different potential effects to the U.S. economy if a situation or policy mandated the closure of the borders. In 2019, research concluded that closure of the border with Mexico would shrink the U.S. real gross domestic product (GDP) by as much as 0.62 percent, or $130 billion per year. The impact would be noticeable beyond the border due to integrated supply chains and Mexico’s role in industries across the agricultural, manufacturing and service sectors. Additionally, more than 600,000 U.S. companies that export to Mexico would be directly affected, while as many as half a million would be indirectly affected.⁴

As expected from hypothetical studies, the economy of the border was affected in very general terms of supply, demand and labor as response to the closure of the border. In 2020, the Baker Institute estimated that the reduction in retail sales for the Texas-Mexico border counties (those with a port of entry) was of around $1.9 billion by multiplying the reduction of Mexican tourists (62%) by the next exporter retail sales ($4.8 billion) and adjusting to the 8-month travel restriction.⁵ Additionally, the Baker Institute estimated that the 13 Texas border counties would lose more than $1.02 billion in direct employment compensation, defined as pre-tax salary and wage earnings. Additionally, the Baker Institute expected the GDP and tax revenue of the border counties to diminish by more than $3.1 bullion. Overall, the Baker Institute expected a reduction of nearly $4.9 billion in the GDP of the border counties, showing how essential the “nonessential” Mexican travelers are to the border.⁶

To better understand the effects of the closure of the border between Canada and Mexico, two groups of travelers from before and after the closure of the United States borders were compared, including passenger vehicles and pedestrians. Commercial trucks were selected to identify overall changes to the number of crossings of this not related with the border policy as this group was not restricted by the policy. The difference in difference analysis will be used to compare the changes in outcomes over time after the border restrictions were implemented, as well as a linear regression comparing total border crossings and sales tax allocation.

Difference in difference analysis was used to test if there was a significant effect to border crossings after the closure of the border policy implemented in March 2019. The first test observed the truck and personal vehicle passengers (pvp) at the four ports of entry selected for the analysis: El Paso, Otay Mesa, Massena, and International Falls. The numbers in the tables are in the logarithmic base of 10 to allow for easier manipulation of data.