The Impact Of Tariffs On Texas
With the new tariffs, Texas could lose more than any other state. And the worries go beyond rising costs to even the reliability of our power grid.
On Monday President Trump definitively announced that some long-promised tariffs against Mexico and Canada would be going into effect on Tuesday. That announcement triggered a swift economic whiplash with a major stock market tumble.
The executive order from the president establishes 25 percent tariffs on imports from Mexico, which is Texas’s largest trade partner, and Canada, and 10 percent tariffs on imports from China. This could potentially be calamitous for many Texans.
With the new tariffs, Texas could lose more than any other state: over 47 billion according to Axios. Economists are warning that a number of items imported from Mexico could immediately start to increase. These include cars, fruits, produce, liquor and electronics.
Both the mayors of San Antonio and Arlington, a major city in North Texas, signed a letter to Senators Cruz and Cornyn about their concern about the “job-killing threat tariffs impose.” Both Mayor Nirenberg and Ross noted their respective cities are the two largest auto-manufacturing hubs in the state.
Manufacturing in Texas actually fell last month because of the looming specter of tariffs. The Federal Reserve Bank of Dallas released a survey about the decline in manufacturing that attributes that to increasing uncertainty among business executives.
Another area of concern for Texans when it comes to the tariffs is our power grid. The nonpartisan think tank the Atlantic Council flagged that the tariffs could make some electronic parts, like transformers, more expensive or backlogged. If that occurs, delays on necessary upgrades could ensue, jeopardizing ERCOT’s ability to keep the state fully powered.
For his part, Governor Abbott has tried to downplay any impacts of the tariffs. He gave an interview to the Houston Chronicle where he called the new tariffs “negotiation tactics” and said he was not worried.
Congresswoman Jasmine Crockett, who represents a district in Dallas, slammed President Trump for implementing the tariffs in a statement. “A trade war with Mexico will hit Texas farmers, ranchers, producers, manufacturers, and other business owners especially hard, hiking their costs and weakening demand for the goods they produce,” wrote Crockett. “In short, Texans are about to be hit left and right—we’ll pay more for nearly everything we buy, and have a harder time selling the things we produce.”
