85R15174 KSM-D     By: Blanco H.C.R. No. 98       CONCURRENT RESOLUTION          WHEREAS, The White House has raised the prospect of a   substantial tax on imports from Mexico, but economists and business   leaders have warned that such a measure would have a severe negative   impact; and          WHEREAS, Although the imposition of tariffs is intended to   make American companies more competitive, the benefits are both   limited and outweighed by numerous and substantial risks, according   to economists across the political spectrum; this is the case   whether tariffs are imposed directly or through a border-adjusted   tax that subsidizes exports; and          WHEREAS, Any border tax would hurt U.S. consumers; tariffs   are effectively paid by the purchasers of goods, and as imported   goods became more expensive, so would any domestic goods that are   reasonable substitutes; in turn, the cost of living would soar,   affecting lower-income Americans the most, as they spend a higher   percentage of their income on goods, especially those produced   abroad; and          WHEREAS, Costs would also rise for U.S. manufacturers of   products that incorporate materials made in Mexico and subject to a   border tax; the enactment of tariffs could cause delays or price   spikes that spiral through the economy and interrupt complex,   time-sensitive supply chains; any slowdown could mean layoffs among   producers and damage to the broader U.S. economy; and          WHEREAS, Jobs would also be lost because of the inevitable   decline in the value of the Mexican peso; the loss of purchasing   power by our trading partner would lead to a drop in U.S. exports,   thereby putting Americans out of work; this would cause havoc in   both the Mexican and U.S. economies, according to former U.S.   Treasury Secretary Lawrence Summers, now a Harvard University   economist, who said that "it would be one of the best things that   ever happened for Asian and European competitors"; and          WHEREAS, If the United States imposes a tariff, Mexico will   no doubt retaliate, resulting in a pernicious trade war; most   experts believe that this would deliver a significant blow to the   economy, and Peter Petri, a professor of international finance at   Brandeis University, has suggested it could take years to rebuild   supply chains disrupted by such conflict; Simon Johnson, a   professor of entrepreneurship at MIT's Sloan School of Management,   has cautioned that the impact would be "much worse than a   recession," and more on the scale of a full-blown financial crisis;   Princeton University historian Sean Wilentz has offered the example   of the Smoot-Hawley Tariff, signed into law by President Herbert   Hoover in 1930, which sparked a trade war that devastated the global   economy; and          WHEREAS, A border tax would be particularly crushing in   Texas; Mexico is far and away our state's top trading partner, as   the Texas Association of Business observed in speaking out against   an import tariff; in 2015, trade between Texas and Mexico amounted   to over $176.5 billion, representing more than a third of our total   trade, with a surplus of $8 billion on our side; as of 2014, almost   400,000 Texas jobs depended on that trade, according to the Wilson   Center Mexico Institute; some Texas businesses have already   suffered due to the mere threat of a trade war, which has driven the   peso to a near all-time low and weakened the purchasing power of   potential customers from Mexico; the effect has been particularly   troubling in such border communities as El Paso, where one in every   four jobs relies on cross-border trade; and          WHEREAS, In 2015, Texas imported $84 billion from Mexico, and   with a 20 percent tariff, businesses and consumers would have paid   $16.8 billion more for the same goods and services; residents   particularly depend on the availability of agricultural products   from Mexico, and a border tax would drive up the cost of healthful   fruits and vegetables; moreover, many large-scale agricultural   concerns in Mexico are owned by American companies; and          WHEREAS, Trade has historically been an engine of prosperity,   benefiting consumers and businesses alike; Mexico is the nation's   third-largest trading partner, and a tariff or border-adjusted tax   on imports would drastically suppress commerce, to the tremendous   detriment of our state and nation; now, therefore, be it          RESOLVED, That the 85th Legislature of the State of Texas   hereby respectfully urge the United States Congress and the United   States president to reject the imposition of an import tax or border   adjustment tax on trade with Mexico; and, be it further          RESOLVED, That the Texas secretary of state forward official   copies of this resolution to the president of the United States, to   the president of the Senate and the speaker of the House of   Representatives of the United States Congress, and to all the   members of the Texas delegation to Congress with the request that   this resolution be entered in the Congressional Record as a   memorial to the Congress of the United States of America.