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Home | News | Trump’s tariffs could hurt Texas, U.S. economies as much as Mexico’s, border leaders and analysts say
Tractor-trailers wait in a long line to cross into U.S. at the World Trade Bridge in Nuevo Laredo, Mexico on April 2, 2019. REUTERS/Daniel Becerril

Trump’s tariffs could hurt Texas, U.S. economies as much as Mexico’s, border leaders and analysts say

With a looming trade war with Mexico on the horizon, Texas’ proximity to its southern neighbor could spell economic trouble for the state’s consumers and workforce.

But it’s the added dynamic of how this country trades with Mexico that could do far greater damage to the state and national economies than President Donald Trump’s current trade battles with China or Canada, analysts warn.

Late Thursday, Trump announced he would begin imposing 5% tariffs on all products imported from Mexico on June 10 if that country didn’t do more to curb the flow of unauthorized immigrants traveling through Mexico on their way to the United States. Trump said he would increase it to as high as 25 percent by October if Mexico doesn’t act.

Since October 2018, when the federal government’s current fiscal year began, more than 460,000 undocumented immigrants have been apprehended on the southern border, surpassing 2018’s fiscal year total of 396,579. The administration has built temporary holding facilities in El Paso and the Rio Grande Valley to house more immigrants and announced earlier this month that more would be built within a couple weeks.

The tariff announcement comes as the Trump administration escalates its trade war with China, which has led both countries to impose billions in duties on goods imported to their respective countries.

But the impact from tariffs on Mexican goods could have a deeper reach because of just how many U.S. products contain parts or labor supplied by both countries, said Shannon O’Neil, the vice president, deputy director of studies, and Nelson and David Rockefeller senior fellow for Latin America Studies at the Council on Foreign Relations.

“The way U.S. workers will be hit by this is very different. The imports coming in from Mexico have the highest percentage of U.S.-made products within them,” she said. “On average, 40 percent of products are made in the U.S. so those American workers that are making that 40 percent are going to get hit as hard as their Mexican counterparts.”

Some industries — including automakers — import and export products back and forth across the border more than once, which means those goods could be subject to multiple tariffs. For example, two of the top U.S. exports to Mexico are auto and computer parts, while two of the top imports from Mexico are auto parts and computers, according to trade data analyzed by WorldCity.

The threat by the president comes after Mexico recently became the United States’ largest trading partner — it has been Texas’ top trade partner for several years. Through March, more than $150.58 billion in two-way trade passed through the countries’ ports: The U.S. exported $63.95 billion worth of goods and imported $86.63 billion worth of goods from Mexico. Texas’ ports at Laredo and El Paso are the the two busiest on the border, with $55.8 and $18.6 billion passing through those regions, respectively.

That means the effect from tariffs will be felt first in border states, O’Neil said.

“Many of those jobs in those regional supply chains where goods and parts come back and forth across the border, many of those jobs are in Texas,” she said. “And the whole logistics industry, the people whose lives depend on trade that move things back and forth, all of those jobs will get hit as this trade gets more expensive.”

Ray Perryman, the president and CEO of the Perryman Group, said a 5 percent tariff, once absorbed through supply chains and market adjustments, could eliminate more than 400,000 U.S. jobs and cause economic losses he estimated at $41.5 billion in gross domestic product.

“If Mexico were to retaliate and impose tariffs on the U.S., which is likely, the effects would be even greater. Texas would bear the lion’s share of this loss given the extensive commerce that occurs between the state and Mexico,” Perryman said in an emailed statement.

Some of the state’s lawmakers and business groups condemned the president’s move and questioned its legality.

“[We] strongly opposes President Trump’s threat to impose unilateral tariffs on Mexican imports. Our analysis suggests the tariffs may not rest on firm constitutional or legal ground, and probably violate international agreements including the North American Free Trade Agreement and those underlying the World Trade Organization,” said Laredo Mayor Pete Saenz, who serves as chairman of the Texas Border Coalition, a group of elected officials and private sector leaders that advocates for more resources at the nation’s land ports.

U.S. Rep. Henry Cuellar, D-Laredo, said the announcement could negatively impact ongoing negotiations between the United States, Mexico and Canada over the United States-Mexico-Canada Agreement, a trade pact seen by some lawmakers and economists as a much-needed improvement to the 1994 North American Free Trade Agreement.

“The President’s threat to impose tariffs on Mexico is a dangerous mistake that will have significant consequences to our economy,” he said. “To properly address the crisis at the southern border, we need to invest in our ports of entry, including increasing personnel, improving infrastructure, and advancing technology.”

Gov. Greg Abbott released a statement saying that the situation at the border has reached a “breaking point” and he put the blame on Congress.

“I’ve previously stated my opposition to tariffs due to the harm it would inflict on the Texas economy, and I remain opposed today,” Abbott said. “Nevertheless, the President is trying to address this emergency. Now, Congress must do its job and start passing laws to fix our broken immigration system.”

An aide to U.S. Sen. John Cornyn, R-Texas, added: “Senator Cornyn supports the President’s commitment to securing our border, but he opposes this across-the-board tariff which will disproportionately hurt Texas.”

U.S. Rep. Kevin Brady, R-The Woodlands, said he understands Trump’s frustrations, but added there is still time to work on a solution before the tariffs are implemented in 10 days.

“The President has made it clear that Mexico must do more to stop this crisis at the border which seemingly has no end, and he is serious about taking whatever actions are necessary to find a real lasting solution,” said Brady, the ranking member on the U.S. House Ways and Means Committee. “Mexico is a valued ally and the new tariffs are not yet in effect, so there is a window here for both countries to find common ground. It is in both of our interests to do so, economically and for stronger security.”

O’Neil said Mexican President Andres Lopez Obrador has already tried to meet some of Trump’s long-standing demands that Mexico do more to curb the flow of Central American migrants.

“He has deported as many people [in less than a year] as [former President] Enrique Peña Nieto did in his last year,” she said. “But the number of people coming has increased so that is the challenge. And with many fewer resources [than the United States].”

Abby Livingston and Patrick Svitek contributed reporting

Read related Tribune coverage

Author:  JULIÁN AGUILARThe Texas Tribune

About The Texas Tribune

The Texas Tribune is a nonpartisan, nonprofit media organization that informs Texans — and engages with them – about public policy, politics, government and statewide issues. Facebook (@TexasTribune) Twitter (@TexasTribune) Instagram (@Texas_Tribune)

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11 comments

  1. Greetings, trumpTURDS

    This all has to do with the POS FASCIST RACIST NAZI Donald Trump’s ego in hurting the American economy to boaster his base of deplorable ass wipes white nationalist that includes some Hispanic Vendidos. Who are nothing but coconuts brown on the outside and white in the inside.
    Regardless, it’s the American people that will all pay for these new Trump tariffs placed on Mexico, just like we are paying not for Donald Trump’s trade war with China. Look what it has done to the American farmers?
    It’s most unfortunately that we can’t impeached him because in the republican controlled US senate, Mitch McConnell will only continue to kiss Trump’s rear end. And quash all attempts by the democrats to remove this animal beast from office and indict him for his crimes.
    Besides that McConnell has an approval rating in his state of Kentucky at 30%, so he will not be returning back to the senate in 2021,and neither will Lindsey Graham in South Carolina. There both gone!!!
    We saw Robert Mueller’s speech on Wednesday, saying that he did not clear Donald Trump of criminal acts but couldn’t indict him.Because it’s a DOJ rule that they can indict a sitting asshole like Trump.
    Then comes William Barr, the so called attorney general saying that Mueller could have indicted Trump but didn’t because he don’t see no wrong doing by the CROOK Trump.
    This nation is going to hell if we don’t stop Donald Trump, as is, Russia is laughing at the United States and the Russians have us right where they want us to be. Divided and fighting with each other.
    Justin Amash the congressman from Michigan is the only republican that also wants to impeach Donald Trump. In his town hall meeting, one of his constituents said that she gets all of her news from the right wing media. And that Robert Mueller exonerated Donald Trump! well that is totally false as the right wind media is full of bull shit lies. And the basket of deplorable’s are believe everything that Trump tells them, it be nice if Trump would tell his base to all go jump is shark infested waters. They would do it because Donald Trump told them that is was OK,it be better if he told them to put a gun against their heads and pull the trigger, they would also willingly do this because trump said that it was OK.
    That is how stupid and ignorant Donald Trump’s base of supporters are, just plain Stupid! that is why they all believe that it is OK to HATE!
    BTW! if a democrat wins the presidency in 2020! he can order the destruction and removal of the border wall, and there is nothing that the deplorable’s can do about it. But watch it get removed.
    With all that go fund me money spent,they could have used that money to send Mike Pence to the moon.
    TRUMP FOR PRISON IN 2021!
    MIKE PENCE TO THE NUT HOUSE IN 2021!
    PRICELESS! PRICELESS! PRICELESS!
    There is nothing like living rent free in the section 8 minds of the deplorable’s! it even comes with refrigerated air and a swimming pool to chill out in the hot summer months.

  2. Libtard Alberto is rabid and delusional as ever. Good to see your extreme TDS running wild and rampant. Trump living in Alberto’s head 24/7. You deserve it.

    Trump 2020!

  3. Greetings, trumpTURDS

    I will say this to the two stupid morons that exported themselves from the KKKVIA NAZI Forum! over to the El Paso Herald Post commenting forum!
    Isn’t it nice that the El Paso Herald Post believes in the First Amendment Freedom of Speech? as opposed to the KKKVIA NAZI forum where they don’t allow the opinions from the democrats to be posted. As all liberal post will get deleted by the SCUM BAG Watch Hawg!
    So Y A’ll knowing that I’m here posting freely on the El Paso Herald Post, you decide to use your usual scare tactic by cyber bullying. Well , you must get over yourselves because your cyber bulling don’t scare me, and there is absolutely nothing you can do about it. FEAR AND COMMON SENSE KEEPS YOU AT BAY!
    For everyone’s information! Mikey aka Mad Mike is a RACIST WHITE NATIONALIST BIGOT!
    SO EL PASO! BEWARE!!! we just had another mass shooting in Virginia Beach this weekend! 12 innocent victims dead! And at one time Mikey proudly exposed himself with another comrade in arms on the KVIA Forum. Both with assault AR 15 rifles, it was supposed to be his Avatar Screen Photo, but he quickly took it down.
    Fero has been inviting me to the Fort Bliss Rod and Gun, expecting me to show up with my arsenal,when I know that I have No Damn Business on base. Probably a set up, but Fero is just as stupid as the assassin that killed those 12 people in Virginia Beach. And his day will come and so will Mad Mike’s day come too, when they do something terribly pathetically insane.
    Mikey is also PRO RUSSIAN! he is the real communist trumpTURD! and Fero is just a weak MORON FOOL!
    They both invited me to live FREE,in their section 8 MINDS! and what I can see is that it’s pretty hollow inside their minds, like a stinky Bat Cave full is shit.
    As for Donald Trump, he don’t ever live in my mind, I’m not a deplorable loser like Fero and Mikey are!
    TRUMP DWELLS INSIDE THEIR MINDS! 24/7.
    These two idiots watch Fox News, as they are both brainwashed by watching Tucker Carlson, Sean Hannity,Jeanine Pirro and the rest of it’s commentating fake news cast.
    Fox News is as oppressive as Russian TV! it’s all nothing but lies. Only Shepard Smith is the only good man!
    And as for Donald Trump, he’s about to arrive in the UK, and the Brits are not happy about it as the Mayor of London does not welcome him. There is going to be HUGE protest for the next three days!
    Another thing I didn’t mention was Donald Trump telling the US Navy to hide the USS John McCain from his visit to Japan last week!
    Fero and Mikey never talk about real topics, since they both trade places allowing Trump to live in their toilet minds, to getting some breathing air and living in Trump’s crotch and perennial area.
    They deserve it!!! PRICELESS!
    TRUMP FOR PRISON IN 2021!
    PENCE FOR THE NUT HOUSE IN 2021!
    Stupid Mike don’t know how the house of congress works! the democrat controlled congress can impeach Donald Trump!
    And Mitch McConnell in the senate will quash their attempts! So therefore starting in 2021, the democrats will have control of both houses of congress! And Donald Trump! William Barr! Steve Mnuchin, and several other republicans will be going to prison.
    I still remember 1974! watching Richard Nixon on the news everyday! Nixon like Trump was also a DIRTY NASTY CROOK! Nixon almost got impeached! but decided to resign in SHAME!
    Donald Trump’s fate will be different! he’ll either make a run for it and seek asylum in Russia!
    Or the United States Marshals all going to come down hard and forcibly remove him from his 1600 Pennsylvania Avenue, Cesspool Swamp! In chains and shackles.

    • Sooner or later you will get forced into a psychological evaluation

    • Rabid Alberto is so funny. All he does is parrots and regurgitates all the leftist propaganda he sees and hears at MSNBC, CNN, WaPo, NYT, HuffPo, Daily Kos, Daily Beast and all the other irrelevant leftists fake news sites. Clear signs that he is an untreated paranoid chronic schizophrenic. He needs to be locked up before he hurts himself or others. He will probably be the next mass shooter or a serial killer since he claims he has an arsenal of weapons. It is obvious he is very mentally unstable and a threat to society.

      • Na, he is just a keyboard commando. He has the IQ of a dung beetle and is totally spineless.

    • The pot calling the kettle black Alberto? YOU are the cyber bully and troll. Your feelings hurt when someone snaps back at you. What a loser!

  4. Greetings LibTARDS

    The latest CNN poll shows 54 percent of Americans believe Trump will win in 2020. Put that in your TDS pipe and smoke it especially you Alberto the loser.

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