News of possible tariffs against Mexico brought more uncertainty to a Texas farming economy already hard hit by international trade politics.
“My first reaction was ‘Oh no, here we go again,’” Russell Boening, the president of the Texas Farm Bureau, said of when President Donald Trump announced plans last week to impose tariffs on Mexican imports. They would go into effect Monday, though Senate Republicans have threatened to stop Trump’s plan.
Texas farmers have for years relied heavily on exporting agricultural products to Mexico, Canada and China to turn a profit, experts say. Texas is among the country’s leading exporters of beef, sorghum and cotton.
An ongoing trade war with China has made it unprofitable for farmers to send their products overseas, leaving many farmers looking for relief in the possible passage of the U.S.-Mexico-Canada agreement, which would look to normalize a long-time trading relationship with Mexico.
For Boening, tariffs against Mexico puts the United States-Mexico-Canada Agreement in jeopardy.
According to Luis Ribera, a professor and director of North American studies at Texas A&M University, said the previous North American Free Trade Agreement, an agreement for tariff-free trade across the continent, was very lucrative for Texas. NAFTA is still in effect, but the threat of tariffs and the possibility of a new deal has made the market unstable.
In 2018, Mexico was by far Texas’ biggest trading partner, as 37 percent of the state’s exports—about $109.7 billion—went to Mexico. The USMCA agreement would undoubtedly be a boon to Texas farmers, Ribera said.
“(Texas farmers) need the new USMCA,” Boening said. “It’s good for agriculture, it’s good for other industries. I think it’s a very legitimate concern that this new round of tariffs can jeopardize moving the new USMCA forward.”
Some Texas Republicans in the House also expressed concern that the proposed tariffs against Mexico could derail or delay a future agreement on the USMCA.
Rep. Ron Wright, a Republican whose district is just south of Fort Worth, said ongoing trade negotiations should be kept separate from efforts to address concerns about the security of the southern border.
“The tariffs the president is talking about would of course hurt Mexico much more than us initially. But eventually they will just impose similar tariffs on us as well,” Wright said. “I would like to avoid endangering the passage of the USMCA Trade Agreement.”
Rep. Roger Williams, a Fort Worth Republican, said that he’s against tariffs in general, but they have gotten the attention of the Mexican government. Williams said he’s hopeful that simply the threat of tariffs will be enough for the Mexican government to comply with Trump’s demands to do more work to secure the border.
“That’d be the best of both worlds where we wouldn’t have to enact the five percent tariff,” Williams said.
Rep. Mike Conaway of Texas, the top Republican on the House Agriculture Committee, said Trump is using tariffs as a weapon to prod China and Mexico to the negotiating table. Negotiations with China have faltered since the President’ announcement of more tariffs against China this month. But White House officials are set to meet with a delegation from Mexico on Wednesday.
Scott Born, a farmer of wheat, corn and cotton whose farm sits south of Dallas-Fort Worth near Waxahachie, Texas, said that for years, he’s struggled to turn a profit, and the escalating trade war with China has made things even harder. But he said he felt that farmers would struggle through the tariffs if it meant eventual trade deals with China and Mexico.
“Most farmers are pretty patriotic and they’d love to sacrifice for what would be good for the whole country as long as there’s some end benefit to it,” Born said.
Senate Majority Leader Mitch McConnell, R-Kentucky, made it clear Tuesday that there was “not much support” from Senate Republicans for Trump’s proposed tariffs against Mexico.
He said that Republican senators spent most of their lunch on Tuesday talking about the proposed tariffs with White House officials. McConnell sidestepped questions about whether the Senate would seek to override Trump, saying he hoped the situation would be resolved.
He said senators are hopeful that talks with a delegation from Mexico “will be fruitful and these tariffs will not kick in,” he said.