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The border tax effect on your food

You’re gonna pay more. Any questions?

The idea of a tariff on Mexican imports or a radical change to the North American Free Trade Agreement — another Trump promise — worries many Texas agriculture industry leaders, who say it is in the state’s best interest to continue fostering a positive trade relationship with Mexico rather than imposing tariffs on their imports.

Mexico is the state’s largest trade partner, overshadowing its two closest competitors, China and Canada, by billions of dollars. According to U.S. Census data, in 2015 Mexico imported more than $92 billion worth of goods from Texas, while Texas imported more $84 billion worth of goods from Mexico.

Luis Ribera, an associate professor at Texas A&M University’s Center for North American Studies, said any large-scale tariff on Mexican goods would hurt American consumers more than anyone else by making everything from avocados to tomatoes more expensive for Americans — or compelling Mexico to buy Texas-produced staples like wheat, beef and corn from other countries.

“We’re going to lose that market or (if we don’t) lose it, we’re going to get tariffs on the products that we send to Mexico,” Ribera said. “So it’s going to make our products less competitive when we compete with the rest of the world.”

Steelee Fischbacher, director of policy and marketing at the Texas Wheat Producers Board and Association, said a potential Mexican tax worries the Texas wheat industry because Mexico is the largest importer of hard red winter wheat, the top class of wheat produced in the state. In 2011, the U.S. exported 2.4 million metric tons of hard wheat to Mexico, according to a Texas A&M study.

“Being our number one customer, it’s a very critical market for us, especially in a time where we have low wheat prices,” she said, adding that Mexico has plenty of other potential trading partners for wheat such as Argentina, Canada and Australia.

This is Econ 101 stuff here, simple enough for even a bad high school student to grasp. And given his support for Dear Leader, it’s another way in which Dan Patrick is bad for Texas business and Texas’ economy. How much more evidence do you need, Texas Association of Business?

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4 Comments

  1. Flypusher says:

    What’s so bad about a bit of a food price increase when it’s going to that worthy cause of building Dear Leader’s glorious border wall? Your attitude is suspect, citizen!!

    Mexico is capable of punching back too:
    http://dakotafreepress.com/2017/02/14/mexican-senator-buy-corn-from-brazil-and-argentina-not-united-states/

    Such a development would not be good, and I hope it doesn’t happen, but if Trump is going to try the bully approach, I couldn’t blame Mexico for doing this.

  2. Bill Daniels says:

    We are going to find out just how good (or bad) a negotiator Trump is when we see what agreement is reached with Mexico. The US has the upper hand, but, as mentioned, a trade war would hurt both sides. Trump will have to sell whatever he does to Nieto, so he can go to his people and say, well, we got xxx from the US in exchange for what we lost.

    The thing about this is, Mexico is already going to need to make fundamental changes to its own country in response to the mass repatriation of its citizens here in the US illegally. Lots of those people are hard working and industrious, and some will bring a better education and varying degrees of English proficiency with them. Hopefully, Mexico can improve its own country, as we improve ours.

  3. Bill Daniels says:

    The other comment I will make about the prices of Mexican goods sold here is, as we watched the peso plummet from around 14 to 21 per dollar, I don’t recall seeing a corresponding drop in prices on things from Mexico. Avocados and tomatoes didn’t get significantly cheaper, for example. So what happened to my increased buying power from a strong dollar? Somebody profited when I paid the same price for Mexican produce, even though it should have been cheaper to buy. Who was that? The farmer? The Mexican exporter, or the American importer?

  4. JJ says:

    The US has a trade deficit with Mexico. The US-Mexico trade represents a net loss to our citizens. All of the jobs that have been outsourced to Mexico came to us while we were the most trade protected nation on earth. If a tariff on avocados drives up the price of avocados about 60 other nations, including the US, produce avocados. If Mexico quits buying Texas products Mexico still needs those products so they buy from SomeWhereElse. SomeWhereElse would then not be supplying ElseWhere. ElseWhere still need product. So they buy from Texas. It’s all good.

    December 5, 1791 Alexander Hamilton delivered to Congress a plan to “Make America Great.” Tariffs! It was not adopted until the end of the War of 1812. From about 1816 until 1967 the US was the most trade protected nation on earth. Antithetical to what is presented here nothing bad happened.

    The Ivory Tower theory of free trade is protected by a bodyguard of lies that ignores the real world history of the United States. In the real world tariff protection creates wealth for our citizens while free trade destroys citizen wealth.

    The real wages of blue collar workers peaked in 1972 and are down since. If free trade actually produced lower prices then those declining prices would push real (inflation adjusted) wages up. But wages have declined. Either prices did not go down or wages went down even more or some combination that resulted in citizens being worse off.

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