President Donald Trump’s new tariffs on goods from Mexico, Canada and China officially took effect on Tuesday, and for many Texans, that means one thing: higher prices on everyday items. From groceries to cars, consumers across the largest exporting state in the nation are bracing for a financial squeeze.
How much more will Texans pay?
The new tariffs impose a 25% tax on imports from Mexico and Canada, while tariffs on Chinese goods have been raised to 20%. Economists say companies will likely offset a good chunk of these additional costs onto consumers.
Here’s how your wallet could take a hit
Groceries and food
Tariffs on produce and packaged foods mean higher prices at the grocery store. The price of fruits and veggies at stores like Target could rise as soon as this week, according to reporting from CNBC.
“Given how perishable the produce is in particular, you’ll start seeing those effects in the grocery stores very quickly,” said Ray Perryman, president of The Perryman Group, a Texas-based economic research company.
According to data from the Perryman Group, the tariffs could add about $1,500 to the cost of goods for an average household per year.
Perryman says Texas will see the largest impact of any state due to the region’s close trade relationship with Mexico. In 2023, trade between Texas and Mexico totaled nearly $300 billion, according to data from Texas Gov. Greg Abbott’s office, ranking Mexico as the state’s top trade partner.
Mexico supplied 63% of U.S. vegetable imports and 47% of U.S. fruit and nut imports, according to the U.S. Department of Agriculture.
Gasoline and car prices
The tariffs could cause gas prices to climb by up to 40 cents per gallon, according to GasBuddy energy analyst Patrick De Haan, making everything from daily commutes to shipping costs more expensive. Texas refines and exports large amounts of oil, but it still imports fuel components like petroleum from Canada and Mexico.
Additionally, Perryman says the price hike in fuel materials won’t just impact gasoline, but other items made with petroleum, like pharmaceutical drugs, paints, adhesives and plastics.
Car prices, along with the cost of repairs, are also expected to rise in the coming months. According to data from the governor's office, the state imported $26.2 billion worth of vehicles and parts from Mexico in 2023 – the third largest import from the country that year.
What comes next?
Economists like Raymond Robertson, director of the Mosbacher Institute for Trade, Economics, and Public Policy at Texas A&M University, say these tariffs could lead to job losses in industries like agriculture, energy and manufacturing.
“Consumers are going to buy fewer things and employers are going to have more expensive parts, which means they don't need as many workers to put them together because they're going to have fewer parts,” Robertson said.
According to data from the Perryman Group, the tariffs could lead to the loss of nearly 400,000 Texas jobs if they persist for a year – costing the state around $46 billion.
However, Ray Perryman says he’s doubtful that the tariffs will stick due to extreme pushback on multiple levels. Canadian and Chinese officials have already implemented retaliatory tariffs against the U.S., and Mexico may soon follow suit.
“This is the kind of thing that, I think, has enough traction to it that you're likely to see that tariffs of this magnitude are probably not going to be sustained for an extended period of time,” Perryman said.
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