Donald Trump

What NAFTA Means to Texas, What Trump Means for Trade

International trade has been good for businesses in Texas and consumers.

One week after President Donald Trump took office, he suggested that the United States would impose a 20 percent tax on all imports from Mexico. There is still uncertainty surrounding international trade and the North American Trade Agreement.

President Trump will meet with Canadian Prime Minister Justin Trudeau Monday to discuss NAFTA.

Trade in Texas has increased under the North America Free Trade Agreement, which was signed into law by Bill Clinton in 1994. Under NAFTA, tariffs were eliminated, investments and trade could flow freely between the United States, Mexico, and Canada.

Texas leads the nation with more than $270 billion worth of goods and services, which helped support 1.1 million American jobs. The majority of Texas exports head to Mexico. According to the U.S. Department of Commerce, in 2015 $92.5 billion goods and service were exported from Texas to Mexico and $25.5 billion to Canada.

“It’s almost hard to overstate how important trade is for Texas,” Southern Methodist University professor of finance and economics Mike Davis said. “Out of all of the states in the country we export more from Texas than anywhere else. We export a lot of energy, agricultural products, and lots of high-tech manufacturing goods come out of Texas and go to the rest of the world. We also have are car factories."

There is a give and take. The Lone Star State’s largest import from Mexico is vehicles and auto-parts. Even American based companies like General Motors and Ford purchase parts south of the border.

“If Texas-based companies can’t buy in the world market, if they can’t get parts and raw materials at the best prices, they can’t compete,” Davis said.

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