Trade war escalation: San Antonio faces big blow from Trump's tariffs
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Sarah Grillo/Axios
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.
State of play: President 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, including groceries and beer.
- The impact will be especially sharp on goods that are harder to produce domestically, including agricultural products.
Threat level: Because Texas is deeply integrated with supply chains — from Mexico, in particular — the state will more heavily feel the strain, Tony Payan, the 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.
The other side: Trump campaigned on using tariffs to revive domestic industries.
Zoom in: Texas-based automotive giants Toyota in San Antonio and General Motors in Arlington face mounting pressure.
- Mayor Ron Nirenberg joined Arlington Mayor Jim Ross in warning that rising production costs could lead to higher car prices, weakened demand and potential job losses in both cities.