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President Donald Trump made good on his threat to apply high taxes to imports from Mexico, Canada and China, a move that swiftly brought retaliation from Texas’ leading trading partners and set the stage for a conflict that could have major implications for the state’s economy.
Trump instituted 25% tariffs on Canada and Mexico and a 10% tariff on China. They’re scheduled to become effective Tuesday.
White House officials told reporters Saturday that tariffs on energy imports from Canada are set at a lower rate of 10%. In implementing the tariffs, Trump fulfilled a promise he repeated frequently on the campaign trail. He has said the tariffs are a response to an increased flow of migrants and fentanyl crossing borders into the U.S.
But free trade advocates worry that the tariffs, of which costs are typically passed onto the consumer, will hurt the pockets of everyday Texans. Some business leaders throughout the state, including those who support many of the president’s other domestic policies, have said that the tariffs will have an overall negative economic impact on the Texas economy.
In the hours since Trump’s orders, Mexico and Canada have announced that they will issue their own tariffs against the United States, marking an escalation in a brewing trade war. Mexican President Claudia Sheinbaum ordered retaliatory tariffs in response to Trump’s action, though the specifics of her proposal aren’t immediately clear.
Canada’s prime minister, Justin Trudeau, also announced tariffs on t he U.S. in a speech Saturday evening. Canada will place a 25% tariff on about $106 billion worth of American goods, he said. The tariffs will start gradually on Tuesday.
As the largest exporting state in the U.S., Texas has strong trade ties with Canada, Mexico and China. In 2023, Texas exported about $130 billion worth of goods to Mexico alone. Texas is also home to the nation’s largest port in Laredo along the southern border. In 2023, the port accounted for more than $300 billion in trade.
Canada and China are also key trade partners for Texas, with the state exporting a collective $62.5 billion worth of goods to both countries in 2023. Common imports from Canada into Texas include oil, gas and chemicals. In 2022, Canada was the largest source of petroleum and crude oil imports into the country, according to the U.S. Energy Information Administration.
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Before Trump imposed the new tariffs, some Republican allies — including Sen. John Cornyn — issued caution and suggested that the president was using the tariffs as a negotiation tactic. Earlier this week, Trump threatened high tariffs on Colombia after the country rejected deportation flights from the U.S. Soon after, Colombia allowed the flights to continue.
According to a post from the White House’s official X account, Trump will impose the new tariffs on Mexico, Canada and China until the three countries cooperate with the U.S. to combat drug trafficking and address the fentanyl crisis.
Trump issued the tariffs Saturday under the International Emergency Economic Powers Act, which gives the president broad authority to regulate certain economic transactions after a national emergency is declared.
“We need to protect Americans, and it is my duty as President to ensure the safety of all,” Trump posted to Truth Social on Saturday evening. “I made a promise on my Campaign to stop the flood of illegal aliens and drugs from pouring across our Borders, and Americans overwhelmingly voted in favor of it.”
Democrats nationwide have sharply criticized the new tariffs. In a statement Saturday, Rep. Jasmine Crockett, D-Dallas, said the tariffs will be “especially catastrophic” for Texans. She warned of a potential trade war that would impact “Texas farmers, ranchers, producers, manufacturers, and other business owners” the most and make it more difficult for the state to sell the goods it produces.
“Trump claims he’s imposing these economically disastrous tariffs as a negotiation tactic—but it’s the American people he’s using as leverage,” Crockett said in the statement.
Texas’ Republican leaders were largely silent on the actions Saturday. U.S. Rep. Beth Van Duyne, R-Irving, said they were avoidable if the countries targeted had done more to stop the flow of fentanyl.
Gov. Greg Abbott, meanwhile, focused his attention on reports that Canadian officials’ retaliatory tariffs would specifically target goods made in Republican or swing states.
In response to an X post from a conservative activist about the targeted tariffs, he issued a warning to Trudeau.
“Careful Trudeau,” Abbott wrote. “The Texas economy is larger than Canada’s. And we’re not afraid to use it.”
