Trade war escalation: Austin faces big blow from Trump's tariffs
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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 retaliatory tariffs from Canada, China and Mexico.
State of play: Trump triggered a global trade war 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.
The big picture: The tariffs will affect big-ticket items like cars and machinery, but also consumer staples.
Zoom in: "An avocado that you buy at the grocery store is not going to be 75 cents, it's going to be a dollar," Kendall Garrison, CEO of Austin-based Amplify Credit Union, recently told Fox 7 Austin.
- "That ripples throughout the entire economy: the prices you pay for food at the grocery store or at your local restaurant."
Bryan Winslow, co-founder of Austin's St. Elmo Brewing Company, recently told KVUE that in anticipation of tariffs he ordered 400,000 aluminum cans that his suppliers bought a while ago.
💸 Follow the money: Canadian tariffs could blow a hole in the profitability of the Pflugerville-based news organization Community Impact, CEO John Garrett told the Austin Business Journal.
- A 25% tariff on the paper the company sources from Canada could cost Community Impact — which prints 2.5 million newspapers every month — as much as $75,000 a month.
The other side: Trump campaigned on using tariffs to revive domestic industries.
Threat level: "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," Tony Payan, the director of the Center for the U.S. and Mexico at Rice University's Baker Institute, tells Axios.