Dangerous Tariffs Could Devastate Texas Jobs and Trade With Mexico

Texas Governor Greg Abbott’s recent call with Treasury Secretary Scott Bessent painted a rosy picture of the state’s economy, brimming with pride over its status as the nation’s top exporter and energy powerhouse. The conversation, held on April 22, 2025, celebrated Texas’ low taxes, diverse industries, and business-friendly climate. Yet beneath this triumphant narrative lies a troubling reality: the state’s economic fortunes are increasingly tethered to volatile federal policies that prioritize corporate gains over working families and environmental sustainability.

Abbott and Bessent’s discussion highlighted Texas’ leadership in liquified natural gas (LNG) exports and its robust trade with Mexico, the state’s largest trading partner. For 23 years, Texas has dominated as the nation’s export leader, fueling job creation and GDP growth. But this success story glosses over the risks of aligning too closely with President Donald Trump’s aggressive trade and tax agenda, which threatens to destabilize the very foundations of Texas’ prosperity.

The governor’s cheerleading for federal tax cuts and trade negotiations reflects a troubling complacency. While Texas boasts a $336 billion budget and a $28.5 billion rainy day fund, early signs of economic softening—flagged by the Dallas Federal Reserve—suggest that tariffs and tax policies could erode these gains. For everyday Texans, the stakes are high: jobs, affordability, and the environment hang in the balance.

This isn’t just about numbers. It’s about the people—factory workers in Houston, farmers in the Panhandle, and small business owners in Austin—who face uncertainty as federal policies reshape the economic landscape. The question is whether Texas will continue to bet on trickle-down economics or chart a path toward fairness and resilience.

Texas’ economy thrives on trade, with 16% of total U.S. trade flowing through the state. Mexico, its largest partner, is integral to this success, supporting supply chains and jobs. Yet Trump’s “America First” trade policies, including a 10% baseline tariff on all imports and steeper duties on specific countries, jeopardize this delicate balance. The Dallas Federal Reserve estimates that a 25% tariff on Mexican and Canadian goods could shave 1.5 percentage points off Texas’ economic growth and eliminate 100,000 jobs.

Abbott’s enthusiasm for ongoing trade negotiations, as discussed with Bessent, ignores these red flags. The administration’s push for reciprocal trade agreements, while appealing in theory, risks escalating tensions with key partners. China’s suspension of U.S. LNG imports amid trade disputes is a stark warning: global markets can shift swiftly, leaving Texas’ energy sector exposed. For a state that prides itself on economic leadership, this is a reckless gamble.

Advocates for working families argue that trade policies should prioritize stability and fairness, not tit-for-tat tariffs. Strengthening ties with Mexico through cooperative agreements, rather than punitive measures, would safeguard jobs and keep costs down for consumers. The alternative—disrupted supply chains and higher prices—hits hardest at those already struggling to make ends meet.

The federal tax cuts championed by Abbott and Bessent, poised to build on the 2017 Tax Cuts and Jobs Act, are framed as a boon for economic growth. But history tells a different story. The 2017 law slashed corporate taxes and boosted wealth for the richest Americans, while offering modest relief to middle-class families. With key provisions set to expire in 2025, the push for another round of cuts risks deepening inequality.

Texas, with no state income tax, already leans heavily on sales and property taxes, which disproportionately burden low- and middle-income households. Federal tax reforms that prioritize corporations over individuals will only exacerbate this inequity. Workers in Dallas and San Antonio deserve policies that put money back in their pockets, not in the coffers of multinational firms.

Opponents of these cuts, including advocates for economic justice, call for a progressive tax system that invests in education, healthcare, and infrastructure. Such investments would bolster Texas’ long-term competitiveness far more than short-term corporate giveaways. The notion that tax cuts for the wealthy drive broad prosperity has been debunked time and again; it’s time for policies that lift everyone, not just the elite.

Texas’ dominance in LNG exports, a point of pride for Abbott, is a double-edged sword. The state’s energy sector fuels jobs and growth, with U.S. LNG export capacity projected to hit 14.2 billion cubic feet per day in 2025. But the environmental cost is steep. Rising export volumes increase methane emissions, a potent greenhouse gas, and domestic energy prices, squeezing households already grappling with inflation.

Trump’s January 2025 executive order to expedite LNG export approvals, reversing Biden-era environmental safeguards, prioritizes profits over the planet. Europe and Asia, key buyers, are increasingly wary of U.S. LNG’s environmental footprint, and global demand is expected to plateau by 2030. Texas risks tying its economic future to a fading industry while neglecting renewable energy, which could create sustainable jobs and reduce emissions.

Environmental justice advocates argue that Texas should invest in wind, solar, and energy efficiency, leveraging its vast resources to lead a green transition. This approach would not only protect the climate but also create jobs in communities often left behind by the fossil fuel economy. Betting on LNG while ignoring these alternatives is shortsighted and dangerous.

Texas stands at a crossroads. The state’s economic strength is undeniable, but its reliance on federal policies that favor corporations and fossil fuels threatens long-term stability. Advocates for working families and environmental sustainability urge a bold shift: tax reforms that prioritize fairness, trade policies that strengthen partnerships, and energy strategies that embrace the future.

The conversation between Abbott and Bessent reveals a troubling disconnect from these realities. By doubling down on tax cuts and tariffs, Texas risks squandering its potential to lead in a rapidly changing world. Instead, the state could champion policies that invest in people—through better schools, affordable healthcare, and clean energy—while safeguarding its economic edge.