How Tariffs Could Affect Texas Economy

Jul 25, 2018

Credit Courtesy: Chuck Smith / Red River Radio News

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.

Jeff Moseley, President & CEO - Texas Association of Business
Credit Courtesy: Texas Assn of Business

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.”

BREAKING FREIGHT RECORDS - The Port of Corpus Christi reports that crude oil and liquefied natural gas exports are boosting business at the facility.
Credit Courtesy: Port of Corpus Christi

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.