Texan Farmers and Businesses Are Being Hit Hardest By Tariffs

During Texas Visit Next Week, President Trump Should Listen to Residents Hurt by His Trade Policies

QUOTE FROM SCOTT FRAZIER, SOUTH TEXAS FARMER: “One quarter of our agricultural products grown in the U.S. are exported to other countries. The economic well-being of American agriculture depends on maintaining and strengthening our export markets, and farm and ranch families depend on this to survive.”

QUOTE FROM TIFFANY WILLIAMS, OWNER OF LUGGAGE SHOP OF LUBBOCK: “Unfortunately, the current tariff list impacts around 85 percent of the products we sell in our store, including all luggage, briefcases, backpacks and most travel accessories. Many of our primary vendors have already announced immediate price increases that are having a negative impact on our October business.”

TARIFF COSTS IN TEXAS MORE THAN DOUBLED TO $424 MILLION. In August 2018, the amount of tariffs paid nationwide increased by $1.4 billion – or 45 percent – as compared to tariffs paid in August 2017. Tariff costs in Texas more than doubled from $161 million to $424 million. Texas also paid the most taxes for steel subject to the section 232 tariffs—$389 million in August alone. The largest increase to existing aluminum tariffs were paid in Texas—$14 million more than before the tariffs. The data was compiled by The Trade Partnership and released by Tariffs Hurt the Heartland. (“New Data Shows A 45% Spike In Tariffs Being Paid By American Businesses and Consumers,” Tariffs Hurt The Heartland, 10/11/18)

‘THE TIP OF THE ICERBERG.’ “‘These tariffs are taxes on American businesses and consumers,’ said Tariffs Hurt the Heartland spokesperson Angela Hofmann. ‘They aren’t paid by other countries. They are paid here at home. What this data shows is that we are already seeing a steep increase both nationally and at the state level in the tariff costs businesses and consumers are paying. This is just the very tip of the iceberg. The data released today offers a glimpse at what the coming pain from the trade war. Once the tariffs on an additional $200 billion in good kick in these numbers will continue to trend sharply upward. We are hopeful that this data, combined the personal stories of harm that we’re sharing across America, will encourage this administration to move away from tariffs and to find new solutions to growing access to foreign markets.” (“New Data Shows A 45% Spike In Tariffs Being Paid By American Businesses and Consumers,” Tariffs Hurt The Heartland, 10/11/18)

STEEL AND ALUMINUM TARIFFS WILL HURT TEXAS OIL AND GAS. “The economic impact of the steel and aluminum tariffs will be significant for the Texas oil and gas industry and the U.S. economy as a whole if left in place. The positive economic contributions are in jeopardy, hence the recent call for an expedited resolution from Texas Gov. Greg Abbott. While well-intended, the tariffs ultimately will result in a slowdown in exploration, production activity and infrastructure projects; job loss; and decreased tax revenue. This will reverberate throughout the state and national economy. The Texas oil and gas sector once again joins Abbott in calling for the removal of tariffs on steel and aluminum for the benefit of our state and industry.” (Ed Longanecker, “Trump’s Tariffs Threaten The Texas Oil Boom,” The Dallas Morning News, 7/23/18)

QUOTE FROM STEVEN COBB, THE DIRECTOR OF THE UNIVERSITY OF NORTH TEXAS’ CENTER FOR ECONOMIC EDUCATION: “The immediate risk to the Texas economy, according to Steven Cobb, the director of the University of North Texas’ Center of Economic Education, is the potential harm Trump’s tariffs could wreak on the state’s agricultural exports to China, the world’s biggest market.’” (Stephen Young, “Trump’s Trade War Leaves Texas At Head of Dark Path, Dallas Observer, 7/11/18)

HENSARLING: LOSING LESS IS NOT THE SAME AS WINNING MORE. “I understand that our trading partners have more to lose than we do because their economies are far more export-dependent. But losing less is not the same as winning more.” (Tom Benning, “‘No Running Or Hiding’: Trump’s Trade War Starts to Hit Texas Consumers,” The Dallas Morning News, 7/14/18)

TARIFF FIGHT MAKES FARMING STRUGGLES WORSE. “Colin Chopelas’ sorghum yield was already ‘substantially’ smaller than expected. Drought conditions in the Coastal Bend killed two-thirds of the grain sorghum he planted on his farm near Corpus Christi. To make matters worse, Chopelas has not found a buyer for 3 million pounds of sorghum he harvested in late June because of the unpredictable market. ‘It’s been challenging – that’s for sure. Not just from a standpoint with the tariffs, but also from just being in a drought situation and not producing anything close to what we need to break even,’ he said. The lack of Chinese trade has exacerbated an already difficult year for farmers in drought-stricken regions of the state. Add years of low farm income to the equation and this year has been a ‘complete disaster’ for sorghum growers, said Wayne Cleveland, executive director of Texas Sorghum Producers.” (Ryan Faircloth, “Texas Sorghum Farmers Squeezed by U.S.-China tariff fight,” Statesman, 9/26/18)

SOUTH TEXAS FARMER: “I DON’T THINK THERE HAS EVER BEEN A TIME WHEN THERE IS SO MUCH MONEY ON THE LINE.” “Trump’s protectionist agenda has entangled the state’s trade-heavy economy on a staggering scale, with each escalation stoking fears from Texas business and political leaders that such a skirmish will risk jobs, curtail investment, increase consumer prices and destroy export markets. The tit-for-tat exchange Friday simply provided a high-dollar exclamation point. Payback from China and other countries for Trump’s trade actions now covers billions of dollars in Texas exports, according to data collected by the U.S. Census Bureau. That hit, focused on the ag and energy industries, appears to be greater than what’s being felt in any other U.S. state. Texas has likewise borne the brunt of Trump’s steel and aluminum tariffs. The state would also feel a keen impact if the U.S. ends up imposing levies on imported cars or if China follows through on a pledge to slap duties on crude oil, petrochemicals and other Texas stalwarts. No corner of the Texas economy is likely to go untouched.” (Tom Benning, “’So Much Money On The Line’: No Corner of Texas Untouched As Trump’s Tariffs Set Off Trade War With China,” The Dallas Morning News, 7/6/18)

QUOTE FROM TEXAS GOV. GREG ABBOTT IN A LETTER SENT TO TRUMP ON JUNE 28TH: “Our country’s steel and aluminum workers are a vital part of the national workforce, and creating jobs in that industry must be a top priority. But attempting to protect these jobs through the new tariffs could jeopardize the livelihoods of hundreds of thousands of Texans and other Americans employed in the oil and gas industry. (John Austin, “Texas Could Be Battleground Over Tariffs,” Weatherford Democrat, 7/13/18)

TEXAS FARM BUREAU: “YOU COULDN’T PICK A WORSE TIME FOR AGRICULTURE TO BE IN A TRADE DISPUTE.” “For Texas farmers, the trade war plays havoc with their bottom line. Tens of billions of dollars of goods are traded between China and Texas each year. Texas imported over $42 billion in goods from the country in 2017, second only to Mexico. It exported about $16 billion in goods to China, placing it behind only Mexico and Canada.” (Matthew Choi, “’No Question, It’s Going to Hurt’: Trump Trade War With China Worries Texas Agriculture,” The Texas Tribune, 7/11/18)

AID PACKAGE IS MORE OF A BAND-AID THAN A BAILOUT. “Lawmakers across the country, like Rep. Cheri Bustos, are not satisfied with the aid. ‘[President Trump] gets us into a trade war, our family farmers who are already struggling will need some help, and then now the president acts like he’s the ‘hero’ coming in with a $12 billion package to rescue them,’ Bustos said. Rep. David Young is not happy about the bailout either. He continues, ‘A lot of farmers aren’t as well. It may be needed though because this is coming from the effect of what the administration has done and it’s an admonition that tariffs are harming agriculture and harming farmers and so it’s not what they prefer.’” (Maggie Glynn, “Local Ag Producers React to $12 Billion Financial Aid Package,” My High Plains, 7/26/18)

QUOTE FROM DR. LUIS RIBERA, PROFESSOR AND EXTENSION ECONOMIST IN THE DEPARTMENT OF AGRICULTURAL ECONOMICS IN THE DEPARTMENT OF AGRICULTURAL ECONOMICS AT TEXAS A&M UNIVERSITY: “What this administration has done is they’ve said, ‘Okay, put China on the stand and try to correct it.’ I think it’s understandable how you can have differences of opinion. This administration has tried to have negotiations while at the same time swapping tariffs, but, as I’ve mentioned before, in a tariff war nobody wins.” (Forrest Laws, “China’s Response to Tariffs Hitting Soybean Farmers Hard,” Delta Farm Press, 8/29/18)

$13 BILLION TEXAS EXPORTS ARE THREATENED BY AN EMERGING TRADE WAR. “3,150,600 Texas jobs are supported by global trade.

  • $669 Million Texas exports to Canada are targeted for retaliation
  • $1.6 Billion Texas exports to Mexico are targeted for retaliation
  • $11 Billion Texas exports to China are targeted for retaliation
  • $183 Million Texas exports to Europe are targeted for retaliation” (“Trade Works. Tariffs Don’t.” S. Chamber of Commerce)

BUSINESSES WARN THAT LAYOFFS ARE COMING: “[Dallas Morning News Reporter Tom] Banning says Texas is the number one exporting state in the U.S. Harris and Tarrant counties are among the five counties nationwide with the greatest exposure to fallout from the trade war. ‘There are businesses in Texas that have been quite clear that the additional costs they’re going to face from these tariffs will mean they’re going to have to curtail investment, they will have to potentially lay off workers, and ultimately, they’ll have to pass on those prices to consumers in some form or fashion,’ Banning says. (“In The Trade War With China, Texas Is On The Front Lines,” Houston Public Media, 7/6/18)

ACCORDING TO DALLAS FED, TEXAS ACCOUNTS FOR 11 PERCENT OF TOTAL MANUFACTURING GOODS, CHINA IS DALLAS’ THIRD-LARGEST TRADING PARTNER: “‘While we applaud the administration’s efforts to protect the intellectual property of American companies, including many in Houston’s energy sector, we view these tariffs as a dangerous path that could have a long-term negative impact on the Houston economy,’ Bob Harvey, president and CEO of the Greater Houston Partnership, said in a statement. Houston stands to be a major beneficiary exporting liquefied natural gas to China, and several companies have invested billions of dollars in LNG plants on the Gulf Coast. For instance, Houston-based Cheniere Energy Inc. reached long-term agreements to sell LNG to China National Petroleum Corp. several months ago. ‘This is our chance to capitalize on our feedstock advantage,’ Harvey’s statement continued. ‘We’re hearing from Houston LNG exporters that their Chinese counterparts are reluctant to sign any long-term deals given market uncertainties.’” (Kyle Cotton and Emily Wilkinson, “Texas Manufacturing Reaches Peak of Uncertainty Amid Trade War,” Houston Business Journal, 8/2/18)

TEXAS IS A LEADING STATE TO BE HIT BY RETALIATORY TARIFFS BY CHINA, MEXICO, AND THE EUROPEAN UNION. “In the escalating trade war, Texas agricultural products are the most threatened by export tariffs, with grain sorghum exports to China leading the pack with nearly $494 million in exports jeopardized, according to U.S. Chamber data. ‘It’s shut us down,’ said Wayne Cleveland, executive director of Texas Sorghum Producers, a 3,400-member industry group. ‘Texas has been a robust market for grain sorghum since 2014 and now we’ve got our product sitting in storage.’ Texas accounts for nearly 60 percent of the U.S. exports of grain sorghum to China and with Chinese buyers cancelling orders, growers are losing an average of 35 cents a bushel, amounting to millions in lost revenue, Cleveland said.” (Marice Richter, “Trade Wars: Tariff Plans Concern Farmers, Ranchers, Others In Texas,” Fort Worth Business Press, 7/14/18)

  • “‘It’s always agriculture that takes it in the shorts,’ said Charles Ray Huddleston, a fourth-generation farmer, who farms about 3,500 acres straddling Collin and Denton counties and lives in Celina. ‘They say the government doesn’t pick winners and losers. I don’t see it that way anymore.’” (Marice Richter, “Trade Wars: Tariff Plans Concern Farmers, Ranchers, Others In Texas,” Fort Worth Business Press, 7/14/18)

TEXAS IS ONE OF THE STATES HIT HARDEST BY THE TRADE WARS AS THE NO. 1 EXPORTING STATE: “The Foreign Trade Division of the U.S. Census Bureau estimates that about $16.3 billion in Texas merchandise was exported to China in 2017, Perryman said. At about $1.1 billion in products each year, agricultural commodities aren’t Texas’ largest export to China. Oil and gas leads, with $5.7 billion, followed by chemical exports totaling $3.4 billion; $1.7 billion in computer and electronic products; and about $1.3 billion in exported machinery. Still, counting suppliers, producers, processors and handlers, Texas has about 6,900 Texas jobs in various aspects of the pork industry, with an estimated $373.6 million in personal income, plus $546.4 million in gross state product, above and beyond the farm level, based on 2016 production and long run prices.” (John Austin, “Trade War With China Could Stunt Texas Agriculture And Economy,” Cleburne Times Review, 4/10/18)

 

###