[dropcap]T[/dropcap]exas is predicted to be the most affected state by the possibility of a trade war with Mexico, according to the online group WalletHub.
The border between the U.S. and Mexico may soon expand into a 40-foot-high, 1,000-mile-long concrete barrier separating us from them. On Jan. 25, President Donald Trump issued an executive order to immediately begin erecting a border wall. But the million-dollar question or, more accurately, the $15 to $25 billion question is: Who will pay for it?
During his presidential campaign, Trump suggested that Mexico itself should fork over the cash to keep its own citizens out of American soil. And when our southern neighbor refused, Trump instead proposed taxing all Mexican imports by 20 percent to finance the wall’s construction. In brief, the so-called “border-adjusted tax” would be imposed on U.S. corporations and discourage them from offshoring business.
If and when the president’s plan comes to fruition, experts predict it will trigger a trade war between our two nations. But the impact of the economic fallout will be different for every state. WalletHub’s data analysts compared the 50 states and the District of Columbia across five key indicators gauging the effects of the possible trade battle.
Texas ranked number 1 as far as the effects of the wall. Arizona came in second and Michigan third. New Mexico ranked fourth and California ranked 11th in the survey.
The states with the highest exports to Mexico as percent of total state exports is not surprising, with Texas, New Mexico and Arizona tying for first. The states with the lowest exports to Mexico are not surprising – Washington, Oregon, Alaska and Hawaii.
The states with the highest exports to Mexico as a percent of the state GDP is Texas and Arizona. Louisiana comes in third, Michigan fourth and New Mexico fifth.
But the exports are not the only thing that will be affected. The WalletHub survey also shows that the highest imports from Mexico as percent of the state GDP – Kentucky, Michigan and Texas tying for first, followed by Arizona and Tennessee.
According to official estimates, Mexico is the third-largest trading partner of the U.S., with exports and imports combined totaling $583.6 billion in 2015 as well as sustaining about 1.1 million jobs in the previous year. President Trump, however, intends to overhaul the North American Free Trade Agreement, or NAFTA, a move that many of his critics fear will result in significant economic and political repercussions on both sides of the U.S.-Mexico border.
Top 10 states affected by trade battle
- Texas
- Arizona
- Michigan
- New Mexico
- Kentucky
- Tennessee
- Utah
- Missouri
- Alabama
- Iowa
Texas tied for top rank in these categories:
- Highest Exports to Mexio as % of Total State Exports
- Highest Exports to Mexico as % of State GDP
- Highest Imports from Mexico as % of Total State Imports
- Highest Imports from Mexico as % of State GDP
