How Tariffs Could Affect Texas Economy
TARIFFS & TEXAS: Trade Tariffs -- When it comes to tariffs, the Texas economy has a lot at stake, Jeff Moseley is president and CEO of the Texas Association of Business, a group that focuses on policies affecting Texas Commerce. He’s worried about the potential effects of a new round of tit-for-tat tariffs from China AND recently shared his concerns with Texas Public Media’s KUT in Austin.
“Texas clearly is the number one exporting state in America," explains Moseley. "So we really have ostensibly the most to lose.”
Last week the Trump administration threatened a new round of 10 percent tariffs on $200 billion dollars in goods. China quickly promised reciprocal tariffs, which would likely target products that come from Texas…things like Crude Oil and Propane.
Moseley says “Propane for example. China is getting 97 percent of their propane from Texas. Crude oil, 83 percent of U.S. exports in crude oil come from Texas.”
There’s also other export products from Texas agriculture businesses.
Moseley points out “Grain sorghum. China depends heavily on grain sorghum to feed its livestock.”
Sorghum exports are worth almost $300 million dollars annually to Texas farmers -- and LONE STAR SORGHUM makes up nearly 60 percent of U.S. sorghum exports. And tariffs won’t just affect exporters. Texas businesses and Consumers have benefited from Chinese imports for decades.
Moseley explains “Because of the low cost of manufacturing China affords and the fact that a lot of U.S. Companies have mastered logistics and can get those products to us at a very efficient price.”
The Texas economy has been on a roll recently but business leaders fear an increase in tariffs could cool things off. West Texas crude oil prices have rebounded. And the Texas Comptroller’s office has increased it’s tax revenue estimate because of better than expected sales tax collections. The Port of Corpus Christi announced it made record highs for freight in the first half of this year, it released a statement that oil exports and liquefied natural gas are on the rise. Two more Texas products that could see lower demand if more tariffs were to be levied by China.