What a 25% Tariff Could Mean For Texas Consumers and Business Owners

Tariffs are rarely a one-way street, as Harvey Kronberg notes in Quorum Report. This is a pressing concern for many Texans, particularly families and business owners who depend on Mexico’s exports to the U.S.—ranging from food products to automotive parts.

To put this into perspective, data from Texas A&M AgriLife highlights the scale of these imports: In 2022, the U.S. imported $18.7 billion worth of fruits, vegetables, and nuts from Mexico, with nearly half entering through Texas. In 2023, total imports from Mexico to Texas reached $142.7 billion. That same year, approximately 590,906 truckloads of produce—each carrying 40,000 pounds—crossed into the U.S., with 55% of fresh fruits and vegetables passing through Texas land ports.

A proposed 25% tariff on food imports through Texas would have significant economic consequences. The cost of these imports would soar to $44 billion, slashing Texas’ $53 billion economic impact by $10 billion. Perhaps even more concerning, the cost of food would climb from $34 billion to $42.5 billion, directly affecting consumers across the state.

Beyond agriculture, the automotive manufacturing industry in Texas is also at risk. The state is home to over 1,700 facilities, and higher costs translate to lower sales, fewer jobs, and reduced economic activity. Many employment hubs depend on parts from Mexico, which are now facing sharply increased costs, threatening their long-term stability.

Nonetheless, this administration is one of the most unpredictable in American history. We’ve already seen how tariff increases can negatively impact consumers—just look at “The Case of Washing Machines” in 2018. A study published in the American Economic Review found that:

• Price Increases Were Fully Passed to Consumers – The 2018 tariffs on imported washing machines led to a 12% price hike, with even dryers—untaxed at the time—rising by a similar margin. This suggests that companies adjust their entire pricing strategy rather than isolating increases to tariffed goods.
• Manufacturers Relocated Instead of Reshoring – When the U.S. imposed antidumping duties on South Korea and China in 2012 and 2016, manufacturers shifted production to other countries like Thailand and Vietnam, rather than bringing jobs back to the U.S. It was only after broad, safeguard tariffs in 2018 that LG and Samsung opened U.S. plants—though their impact on domestic employment was modest.
• High Cost Per Job Created – While tariffs led to some U.S. manufacturing jobs, the cost per job exceeded $800,000 annually due to increased consumer prices, raising doubts about their economic efficiency.
• Tariff Elasticity Above 100% – The study found that tariffs were fully passed to consumers, and in some cases, prices rose even more than the tariff percentage itself, suggesting companies used tariffs as a reason to raise prices further.

What Does This Means for Trump’s Current Tariff Plans?

If the administration moves forward with broad tariffs similar to those in 2018, consumers could face steep price increases and minimal job growth at a high cost:

• If the tariffs target specific countries, manufacturers may once again relocate production rather than reshore jobs.
• Industries similar to washing machines—such as automotive parts or electronics—could see price spikes that hurt both businesses and consumers without meaningfully boosting U.S. manufacturing.

Beyond direct economic effects, tariffs can have broader political and financial consequences. Tesla, for example, has demonstrated how major business relocations remain deeply tied to politics. The Austin-based automaker is experiencing steep sales declines worldwide, partially due to the political activism of its founder.

Meanwhile, stock market analysts warn that prolonged tariffs could destabilize financial markets. The hope is that Trump, as in his first term, will view the stock market as a key performance indicator and act accordingly. However, the broader argument for tariffs remains one of the weakest economic policies seen in modern trade debates—one that history suggests will do more harm than good.