Tariffs on Mexico would cost Texas thousands of jobs, billions to economy: analysis

A U.S. Customs and Border Protection (CBP) officer, right, and a Servicio de Administracion Tributaria (SAT) officer, center, prepare to inspect strawberries at the CBP-SAT Pre-inspection Pilot Facility in Tijuana, Mexico. The conflict over trade adds to tensions in the U.S.-Mexico relationship. less A U.S. Customs and Border Protection (CBP) officer, right, and a Servicio de Administracion Tributaria (SAT) officer, center, prepare to inspect strawberries at the CBP-SAT Pre-inspection Pilot Facility in ... more Photo: David Maung / Bloomberg Photo: David Maung / Bloomberg Image 1 of / 1 Caption Close Tariffs on Mexico would cost Texas thousands of jobs, billions to economy: analysis 1 / 1 Back to Gallery

Texas could lose over 100,000 jobs if tariffs are levied against Mexico by the U.S., as President Donald Trump threatened on Twitter last week, and could cost the state's economy billions of dollars, according to recent economic analysis.

If the president follows through with the threat, a 5 percent tariff could cause a loss of nearly $11.9 billion in gross product to the Texas economy as the tax multiplies throughout households and businesses, and result in 117,335 jobs lost across the state, according to analysis by the Perryman Group, a Texas economic consulting firm.

Trump tweeted that he would levy a 5 percent tariff on all Mexican goods coming to the U.S. that would gradually increase until the influx of immigrants and asylum seekers at the Mexican border ceases. Mexican officials, in response, have begun negotiations on immigration and trade in Washington this week with U.S. officials.

HURTING HOUSTON?: Tariffs on Mexico could deal blow to Houston economy

Each year the 5 percent tariff is in place would create a loss of $41.5 billion to the U.S. economy, the firm estimates, resulting in an overall job loss of about 406,000.

Texas would bear the "lion's share" of the loss due to the state's close economic relationship with Mexico. Mexico is the state's largest export market, accounting for 35 percent of exports from Texas in 2018.

The manufacturing industry, financial sector and retail industry would be hurt the most by the tariffs, according to the analysis.

Trade between Houston and Mexico averages $23.4 billion per year, according to estimates from the Greater Houston Partnership. According to local economists, the effect of escalating tariffs on the Houston economy would be particularly negative given the city's strong trade relationship with Mexico. For consumers, goods such as automobiles, gasoline, beverages and produce would likely increase in price if the tariffs are levied.