Tex-Tax: How Texas Consumers and Businesses Will Pay for Building the Wall

President Trump’s rash idea to slap a 20% tax on imports from Mexico will surely lead to a counter-tariff from Mexico. That’s how trade wars work.

The state with the largest exposure to a trade war with Mexico is, unsurprisingly, Texas. In 2012 (most recent figures I can find), Texas exported 26.4 billion dollars in goods and services to Mexico. That accounted for 35.4% of all U.S. export trade with Mexico. The number of jobs dependent on trade with Mexico— in Texas, alone— was 463,132 (again in 2012).

Texas is also the leading importer of Mexican goods. So, when President Trump announced this afternoon that he’d seek a 20% tax on Mexican goods, the Dallas News blared this headline to its readers:

Trump's 20 percent tax on Mexican imports would force U.S. consumers to pay for border wall

Here’s what this lead story says (quoting below):

WASHINGTON -- The White House floated the idea Thursday of imposing a 20 percent tax on Mexican imports, arguing that would be more than enough to pay for a controversial border wall.

Such a tariff on goods and services would be paid by U.S. consumers and businesses -- people buying anything from avocados and tequila to automobiles.

On its face, that doesn't appear to fulfill President Donald Trump's oft-repeated vow to force Mexico to pay for the barrier, which Mexican leaders have made clear they don't want and certainly won't agree to pay for.

Texas imported $84 billion from Mexico in 2015, suggesting that once the tariff was in place, Texas businesses and consumers would pay an extra $16.8 billion for the same goods and services.