Texas faces big blow from Trump's tariff

AXIOS

Share of total U.S. exports and imports by top trading partners

January to September 2024

A bar chart showing the share of total U.S. exports and imports by top trading partners from January to September 2024. Mexico leads exports at 16.4%, followed closely by Canada at 17.0%. In imports, Canada accounts for 12.8%, while China has a notable 13.3%. Other countries include Germany and Japan.

Exports

Imports

Mexico

16.4%

15.7%

Canada

17.0

12.8

China

6.8

13.3

Germany

3.7

5.0

Japan

3.9

4.5

Note: Countries are arranged by share of total trade; Data: U.S. Census Bureau; Chart: Axios Visuals

Texas stands to take the hardest hit of any state under the Trump tariffs on Mexico, Canada, and China, leaving businesses and consumers bracing for higher prices and economic fallout.

Why it matters: If foreign goods cost 25% more, someone has to absorb the difference — either businesses or consumers.

• Some estimates suggest the new tariffs could cost the average U.S. household $830 a year — and that's before factoring in likely retaliatory tariffs from Canada, China, and Mexico.

State of play: President Trump triggered a global trade war with the biggest U.S. trade partners Tuesday by slapping 25% tariffs on exports from Canada and Mexico and 20% on China.

• The tariffs on imported goods could cost the Texas economy an estimated $47 billion, per economic research firm Trade Partnership Worldwide.

Zoom in: Arlington Mayor Jim Ross warned that rising production costs could lead to higher car prices, weakened demand and potential job losses at the General Motors manufacturing facility in the city.

The big picture: The tariffs will affect big-ticket items like cars and machinery, but also consumer staples — everything from groceries to beer and oats.

• The impact will be especially sharp on goods that are harder to produce domestically, such as many agricultural products.

The other side: Trump campaigned on using tariffs to revive domestic industries.

Threat level: Because Texas is deeply integrated with supply chains — from Mexico in particular — the state will more heavily feel the strain, Tony Payan, director of the Center for the U.S. and Mexico at the Baker Institute, tells Axios.

• "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," he says.