Donald Trump’s tariffs will likely take the biggest toll on Texas, multiple economics experts told Newsweek.
Multiple economic analysts warned Newsweek that Donald Trump’s tariffs will disproportionately affect Texas.
Last week, the president-elect stated plans to slap 25% tariffs on all items imported from China, Canada, and Mexico “until such time as drugs, particularly Fentanyl, and all illegal aliens stop this invasion of our country!”
While Trump’s tariffs on Mexico are projected to raise consumer costs for a variety of imported goods, they would have a far-reaching negative impact on the US economy. They will make life difficult in Texas, where the majority of Texans voted for the tariff-touting incoming president.
Ray Perryman, CEO of the financial analysis business The Perryman Group, told Newsweek that the negative consequences of Trump’s tariffs will most certainly hurt Texas “because of its proximity to and integration of supply chains with Mexico.”
“Texas would see a disproportionate impact, which we estimate to be about $46.9 billion in yearly gross state product (about 1.7 percent of the total) and approximately 370,000 jobs,” Perryman told reporters.
Perryman cautioned that imposing 25% tariffs on all goods from Mexico and Canada would result in an estimated loss of $250.6 billion in yearly national GDP and approximately 1.97 million jobs, or nearly 1% of the US GDP.
Gary Clyde Hufbauer, a senior scholar at the Peterson Institute for International Economics, told Newsweek that the proposed tariffs will “severely impact” Texas.
“Not only all those avocados, mangos, beer, tequila etc. becoming more expensive to Texas consumers, but the decline in cross-border truck and rail traffic will throw a lot of Texans out of work,” warned Mr. Jones. “There is also the loss of Texas sales of consumer products, cattle, gas, petroleum, and electricity to Mexico. Thrown in a drop in Mexican tourism in Texas.”
Tony Payan, director of Rice University’s Baker Institute for Public Policy’s Centre for the United States and Mexico, told the Texas Standard that the “stakes could be high for both Texas and Mexico” in light of Trump’s proposed tariffs.
“The two countries conduct $800 billion in trade each year. Payan said that half of total, or $400 billion, is effectively intra-firm commerce. “That is, trade that occurs between manufacturing firms—the parts that come from Mexico or come from the United States into Mexico to complete the cars and to complete the goods that are traded.”
Payan added that he was unsure whether Trump would “make good” on his vow to impose tariffs, but he believed the president-elect would eventually realise how “integrated” the two economies had become.
Maxwell Marlow, director of research at the Adam Smith Institute, expressed similar concerns to Newsweek, saying that Trump’s tariffs would “be particularly devastating for areas such as Texas, where goods cross borders multiple times during their production.”
Marlow said that the United States should expect retaliatory tariffs from Mexico, which would disproportionately harm Texas.
Professor Dennis Jansen, chairman of the economics department at Texas A&M University, highlighted to Newsweek that retaliatory tariffs would be particularly devastating because Mexico receives a whopping 29% of Texas’ exports.
“If there is retaliation from abroad—say if Mexico follows through on the threat to raise tariffs on goods exported from the U.S. to Mexico—this will further reduce the demand for Texas (and overall U.S.) exports,” Jansen told reporters.