Why Texas would be the biggest loser in a trade war with Mexico

Why Texas would be the biggest loser in a trade war with Mexico
Pamela Taylor, whose home is on the south side of the border fence, stands near a sign she erected, in Brownsville, Texas.
Source: Eric Gay/AP
Pamela Taylor, whose home is on the south side of the border fence, stands near a sign she erected, in Brownsville, Texas.
Source: Eric Gay/AP

The border between Texas and Mexico runs 1,254 miles — approximately two-thirds of the total length of the border between Mexico and the United States. If President Donald Trump builds a wall along the border and imposes a tariff on Mexican goods, which he has promised to do, Texas, more than any other state, will be hardest-hit economically, according to a new report by WalletHub, a personal finance website.

The site looked at five key metrics: exports to Mexico as a percentage of total state exports, exports to Mexico as a percentage of state GDP, imports from Mexico as a percentage of total state imports, imports from Mexico as a percentage of state GDP and percentage of jobs supported by trade with Mexico. Of those, Texas tied for first place in four and ranked fourth-to-last in one.

Mexico is the U.S.' third-largest trading partner, according to the office of the United States Trade Representative. It is also Texas' largest export market, according to data from the International Trade Administration. It should come as little surprise, then, that many U.S. states would suffer economically if Trump gets his wall and his tariff. According to WalletHub, Texas, Arizona, Michigan, New Mexico and Kentucky would be the five states hardest-hit. Of those, all but New Mexico went for Trump in the 2016 presidential election.

U.S. President Donald Trump signs an executive order to start the Mexico border wall project.
Source: Nicholas Kamm/Getty Images

Trade war could lead to U.S. and Mexico recession

Experts interviewed by WalletHub had mixed predictions about the possible fallout of a trade war with Mexico. "[A] trade war alone would likely not have much impact on the overall economy, as distinct from some relevant sectors and consumers," David E. Kaun, a professor of economics at the University of California-Santa Cruz, told the site. Charles Hankla, an associate professor of political science at Georgia State University, disagreed. A trade war with Mexico would "very likely put both countries into a recession," he said.

Texas politicians have been quiet on the prospect of Trump's wall. Texas Gov. Greg Abbott didn’t mention the wall or the tariff in his 2017 state of the state address. But, in the past, Abbott has predicted Trump's wall proposal would be scaled back in areas of the state where the Rio Grande River, which separates the U.S. from Mexico, becomes "serpentine."