Trump Is Messing With Texas

President Trump is setting a collision course with Mexico that threatens to derail the Texas economy. Too bad the average Trump supporter has no clue of the danger.

Look at social media and you have Trump supporters cheering  ending NAFTA, building a border wall and placing a 20% tariff on the approximately $60 billion in surplus imports will be GREAT for the US. (The $60 billion represents a trade deficit of approximately 10% of total trade of $584b with Mexico).

Meanwhile, trade experts and economists will tell you none of this is actually good for the US.

  • Mexico is the US’s. second largest export market behind Canada. In 2015 we exported $236 billion. Leading categories include machinery($42b), electrical machinery($41b), vehicles($22b), fuels($19b) and plastics($17b).
  • Mexico accounts for 15.7% of US total exports.
  • Total exports to Mexico have increased 468% since NAFTA was ratified in 1993.
  • America’s farmers exported $18 billion in agricultural products making it the US ‘s 3rd largest agricultural export market.
  • US exports of services including travel, transportation and intellectual property like computer software totaled an additional $30b. (We run a trade surplus of $7b with Mexico here.)

Anyway you slice it that’s a significant amount of American jobs. Americans who hold those jobs are located in almost every state in the US.

But if you live in Texas you stand to suffer the most if Trump starts a trade war with Mexico.

  • Mexico is Texas’ largest foreign trading partner. It exports about $93 billion in goods and services each year to Mexico or about 40% of Texas’s total foreign exports. (Texas’ exports are equal to almost 40% of the US total exports to Mexico.)
  • An estimated 420,000 jobs in Texas are dependent on trade with Mexico. Ninety-five percent of these jobs are in manufacturing.
  • These jobs pay on average 20% more than an average service job.

Top the potential job loss off with increased consumer prices on everything from new vehicles to food and clothing, and the Texas economy stands to take a severe hit from a trade war with Mexico.

Starting a needless trade war with Mexico, could be the thing that pushes Texas from Red to Blue on the electoral map. President Trump may become familiar with the state motto, DON’T MESS WITH TEXAS and not in a way that makes him or Republicans happy.

US Mexico trade data source here; Texas/Mexico trade data source here and here

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