This deep-red state is expected to suffer the biggest blow from Trump’s tariffs

04 March

Some of President Donald Trump's biggest supporters may end up bearing the brunt of damage from his new tariffs imposed on China, Canada and Mexico.

Axios reported Tuesday that out of all 50 states, Texas could be the hardest-hit state out of all the others if his tariffs end up resulting in higher prices for consumers. According to Tony Payan — who is the director of the Center for the U.S. and Mexico at the Baker Institute – the Lone Star State's deep connections to the global supply chain (especially Mexico) is the primary reason Texans will likely suffer the biggest economic hit.

"Because Texas is the origin, destination or transit point of two-thirds of binational trade, clearly, Texas will be more affected than other states that are not as integrated," Payan told Axios.

The Dallas Business Journal recently reported that Arlington, Texas Mayor Jim Ross, whose city has a General Motors plant that employs several thousand people, has been particularly vocal in his opposition to Trump's trade policy. is worried that the new higher cost of importing vehicles could mean that some of his constituents may lose their jobs.

"My job as mayor is to do everything in my power to protect those gainfully employed individuals," Ross told local outlet WFAA. "That's why I'm passionate about saying, 'Enough with the tariffs.'"

Tariffs are widely understood to be an additional cost to consumers in the form of higher prices. If a company has to pay 25% more to import products, it's likely that they'll refuse to absorb the cost themselves and instead pass it on through the sticker prices consumers pay. And if costs do go up, products that are difficult to make in the United States (like certain agricultural products that can only grow in certain climates) would see the biggest price increases. High-ticket items like vehicles made in China and Mexico could also become much more expensive, and could result in consumers delaying those larger purchases until prices come down.

Investors fearing a decline in consumer spending caused financial markets to drop precipitously this week, with the Dow Jones Industrial Average seeing a drop of more than 1,300 points in response to Trump's tariff threat. However, his new 25% tariffs on Canada and Mexico that he reinstated this week could come down, as Commerce Secretary Howard Lutnick indicated that the president could be willing to "work something out" with the United States' neighbors following two straight days of trading instability. Canadian Prime Minister Justin Trudeau said recently that he planned to impose retaliatory 25% tariffs on American imports, like Kentucky bourbon whiskey and dairy products from Wisconsin. Trump said that if Canada struck back, he would follow up the 25% tariff with an additional duty fee.

Click here to read Axios' report in full.

From Your Site Articles