Saturday, June 15, 2024 Jun 15, 2024
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Will a Trump Presidency Be Devastating for the Texas Economy?

The Lone Star State helped put the billionaire in office. But his economic policy leaves Texas in the cross hairs.

At this point, who really knows anything about what a Trump presidency will look like. One clue, however, rests in the president-elect’s plan for his first 100 days in office. The Trump campaign put out the plan in October, but thanks to the generally buffoonery that defined much of this campaign, it didn’t get much press.

Turns out, putting debate over the infamous wall aside, much of what Trump hopes to do may not exactly be very good for Texas, a state which Trump won. At least that’s the argument author Richard Parker makes over on the Dallas Morning News. In particular, Trump’s intent on renegotiating NAFTA and opening up U.S. oil supplies to world markets may provide the one-two punch of drying up international trade that flows through the Texas economy and driving down the price of oil even further than it is today. That’s really scary for Houston, but will hurt any city that sits on I-35.

The op-ed, which also touches on how Trump’s immigration policies may impact the Texas workforce — not to mention law enforcement resources and basic human rights — is worth a read, but here’s the most troubling bit from an economic perspective:

Now, this might all be entertaining if you live in a place that hates international trade and really needs lots of cheap fossil energy. The problem is, if you’re reading this, you probably don’t. You live in Texas. And here — as opposed to, say, Ohio — international trade accounts for 1 in 5 jobs. That’s about 3 million people. Houston and Laredo are among the 10 busiest ports in America.

To put that into perspective, that’s more than 10 times as many employed in the oil and natural gas industry. In a trade war with China, it seems quite likely that foreign companies would reduce their risk and footprint in the United States. There are more than 500,000 Texans working for foreign-owned companies like Samsung in Austin and Toyota, soon to be in Plano.

If you voted for Trump, you’re probably second-guessing yourself right now. But don’t worry. There’s more.

Texas is the largest beneficiary of NAFTA, which pumps nearly $500 billion into the U.S. economy annually, and nearly half of that winds up in, yes, Texas. If you’d like to see it for yourself, get on Interstate 35 any day of the week. More than 3 million trucks cross into Texas from Mexico each year, and about 2 million head south. By 2020, 70,000 trucks will traverse the 70 miles between Austin and San Antonio alone.

Now imagine Laredo quiet, trucks idled, and just the sound of crickets on the mesquite plain. Then imagine the ripple effect all along the I-35 corridor, not to mention in the Targets, the Wal-Marts, the HEBs — and far, far beyond.

Parker also makes the point that some of Trump’s proposals, like placing term limits on members of congress, may run into trouble in the House even though it is Republican controlled. The next question seem to be to what extent will Trump’s populist economic policies run into opposition from members of his own party, particularly those in Texas who understand how devastating they could be back home.