U.S. Chamber says Trump tariffs on Mexico would impose $45 million tax on Arkansas firms

If President Donald Trump moves forward with his plan to impose a 5% tariff on all goods from Mexico starting on June 10, the impact would be equal to a $45.2 million tax on Arkansas businesses and families, according to new analysis released Friday (March 31) by the U.S. Chamber of Commerce.

The analysis by the nation’s largest business lobby, usually a reliable ally to the Trump administration, shows the total value of 2018 goods imports from Mexico for all 50 states and the corresponding impact of imposing tariffs at the 5%, 10%, 15%, 20%, and 25% level based on data from the U.S. Department of Commerce.

The powerful business lobbying group, with over 3 million members nationwide, said it was exploring all options, including possible legal action following the Trump administration’s announcement on Thursday to impose tariffs on Mexico in response to the influx of migrants at the southern border.

For Arkansas, which last year reported imported goods from Mexico valued at nearly $904.2 million, the possible economic impact on new tariffs at 10% and 15% would jump to $90.4 million and $135.6 million, respectively. On the far end of the scale at 25%, proposed tariffs by the Trump administration would impact Arkansas’ economy to the tune of a whopping $226 million, more than a quarter of all the total value of imported goods from Mexico in 2018.

“Imposing tariffs on goods from Mexico is exactly the wrong move. These tariffs will be paid by American families and businesses without doing a thing to solve the very real problems at the border,” said Neil Bradley, chief policy officer for the U.S. Chamber of Commerce. “Instead, Congress and the president need to work together to address the serious problems at the border.”

Nationwide, a 5% tariff on imported goods from Mexico, which last year totaled $346.5 billion, would result in a potential tax increase on American businesses and consumers of $17 billion. Furthermore, that number would eclipse $86 billion should the tariffs reach the President’s threatened cap of 25%.

U.S. Chamber officials said trade with Mexico, which recently became the top U.S. trading partner, supports economic growth and jobs in all 50 states. Businesses, workers, and families in Texas, Michigan, California, Illinois, Ohio and Arizona will be hit the hardest by the proposed tariffs with a total impact collectively exceeding $10 billion, officials said.

Besides the U.S. Chamber, the influential Alliance of Automobile Manufacturers, the National Association of Manufacturers and other top U.S. business trade groups also warned the Trump administration about the potential devastating consequence of levying new tariffs on Mexico.

NAM President and CEO Jay Simmons said his trade group shares President Trump’s frustration with the nation’s broken immigration system, but said mixing trade and immigration issues together creates a “Molotov cocktail of policy.”

“Manufacturing workers should not be forced to suffer because of D.C.’s failure to act on immigration,” said Timmons.

Today, Mexico and Canada are tied at 7.8% as the third and fourth top importers of foreign goods into Arkansas. China provided 44.8% of Arkansas imports in 2018, followed by France at 11.4%, according to Census data. On the export side, Canada and Mexico are the largest purchasers of Arkansas goods at 18.7% and 13.4%, respectively, although the U.S.-Mexico-Canada agreement (USMCA) still has not been ratified.