How badly would a U.S.-Mexico trade war hurt New Mexico?
Pretty badly, according to a new study by WalletHub, a company that studies trends in the economy and finance. WalletHub ranked New Mexico No. 4 on a list of states that would be hardest-hit by a trade war with our southern neighbor.
Why is WalletHub talking about this?
Events during President Donald Trump’s first week in office left the U.S.-Mexico relationship bruised and the fate of free trade between the two countries in limbo.
President Donald Trump signed an executive order authorizing the construction of a border wall on Jan. 25. He followed up with a message on Twitter telling Mexican President Enrique Peña Nieto that “if Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting” in Washington.
Peña Nieto, who has repeatedly said Mexico would not pay for a border wall, responded the next day by cancelling the meeting.
Trump Press Secretary Sean Spicer then said that the administration would consider placing a 20 percent tariff on Mexican imports to pay for the multibillion-dollar wall — a proposal that White House Chief of Staff Reince Priebus later walked back, saying it was one in a “buffet of options.”
Among the 50 states, New Mexico ties for first place with Arizona and Texas for the highest percentage of exports to Mexico as a percentage of total state exports, as well as for imports from Mexico as a percentage of total state imports.
The state ranks fifth among states with the highest percentage of exports to Mexico as a percentage of state GDP.
Every day, hundreds of 18-wheelers cross the border at New Mexico’s Santa Teresa port of entry, moving materials, parts and products between the U.S. and Mexico’s maquila assembly plants. The state’s port of entry at Columbus is also a trade hub, especially during the chile harvest when truckloads of green chile grown in Mexico head north to New Mexico processing plants.
The WalletHub study weighed five figures: exports as a percentage of total state exports and GDP; imports as a percentage of total state imports and GDP; and the share of jobs supported by trade with Mexico.