What to Know
- President Donald Trump’s threatened tariffs of 5% on Mexican imports will affect key electoral states such as Arizona, Michigan and Texas
- The duties potentially jeopardize approval of the president’s updates to the North American Free Trade Agreement
- The tariffs would hit a variety of industries, from transportation equipment to computer and electronic inputs
A handful of U.S. states — including some that will play big roles in the 2020 election — will feel the brunt of the pain from President Donald Trump’s new tariffs on imports from Mexico.
On Thursday night, the president said the U.S. would put 5% duties on all Mexican imports on June 10 to push its southern neighbor to curb illegal immigration. The tariffs will gradually increase to 25% in October, the White House said.
If Trump goes through with the duties, their effects will ripple across the country. America imported $346.5 billion in goods from Mexico last year, 10% more than in the prior year, according to the Office of the U.S. Trade Representative. But several key 2020 electoral states would take a particularly sharp blow from the tariffs.
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Border state Arizona gets about 40% of its imports from Mexico, the highest share for any state. About 38% of Michigan’s imported products come from Mexico, while about 35% of Texas’ imports are from its southern neighbor.
Trump’s surprise tariffs on Mexican goods could raise costs for companies and consumers in those three states, which the president carried in the 2016 election.
Michigan is a swing state that had voted for Barack Obama in 2008 and 2012. Texas is a reliably red state, but nonetheless has several Republican lawmakers facing tough reelection campaigns next year. Arizona has been trending toward favoring Democrats.
The duties could have broader effects. They raise questions about whether the U.S. and Mexico can ratify updates to the North American Free Trade Agreement, a top Trump priority. Only Thursday afternoon, the Trump administration took a formal step to speed up congressional approval of the deal, dubbed the United States Mexico Canada Agreement, or USMCA.
The Republican senators from Iowa — an electoral swing state reliant on agricultural exports to Mexico and Canada — warned of dire consequences from the tariffs. Senate Finance Committee Chairman Chuck Grassley called Trump’s plan a “misuse of presidential tariff authority” that “would seriously jeopardize passage of USMCA, a central campaign pledge of President Trump’s.” Sen. Joni Ernst, who is up for reelection next year, also said that “if the president goes through with this, I’m afraid progress to get this trade agreement across the finish line will be stifled.”
Sen. Martha McSally, an Arizona Republican who will run to keep her seat in one of next year’s most important Senate races, said in a statement that she does not “support these types of tariffs, which will harm our economy and be passed onto Arizona small businesses and families.”
Sen. Gary Peters, a Michigan Democrat up for reelection next year, said in a statement he is “concerned about the impact of the president’s proposal on Michigan workers and our auto industry.” He added that “it’s unclear how this will strengthen security” at the U.S.-Mexico border.
The most powerful Republican in Congress, Senate Majority Leader Mitch McConnell, gave a more tepid response. In a statement, the Kentucky lawmaker said “a healthy and vibrant economic relationship with Mexico is a vital source of our joint prosperity.”
“Any proposal that impacts this relationship deserves serious examination and I look forward to discussing this plan in greater detail with my colleagues and the administration,” he said.
Sen. John Cornyn, R-Texas, and Rep. Will Hurd, R-Texas — both of whom could face tough reelection bids next year — did not immediately respond to CNBC’s requests for comment.
The tariffs would affect a range of products and industries. The top imports from Mexico include transportation equipment, computer and electronic products, and chemicals.
Business interest groups, from the National Association of Manufacturers to the National Pork Producers Council, criticized the tariff plan, raising fears about the prospects for USMCA ratification and retaliatory tariffs on American exports to Mexico.
This story first appeared on CNBC.com. More from CNBC: