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March 03, 2017 at 08:59 AM
A report released in February by WalletHub identified which states would be hurt most by a trade war with Mexico.
The trade plan outlined on the White House website centers on withdrawing from the Trans-Pacific Partnership and renegotiating NAFTA.
Bloomberg reported Friday that the peso rose 1.9% following comments by U.S. Commerce Secretary Wilbur Ross that the currency could recover “quite a lot” if the Mexican and U.S. governments can come to an agreement on trade. However, Mexican Economy Minister Ildefonso Guajardo told the news service in an interview on Monday that his country wouldn’t entertain suggestions to implement duties or quotas in imports from Mexico.
Guajardo said NAFTA “has been a very efficient tool to improve U.S. and Mexico relationships,” and noted the agriculture and manufacturing industries could be especially hurt by changes to NAFTA.
Antonio Saravia, assistant professor of economics and director of the BB&T Center for Undergraduate Research in Public Policy and Capitalism at Mercer University, said in the WalletHub report that pulling out of NAFTA would be “disastrous.”
“Mexico and Canada have always been among the top five major US trading partners. Mexico and Canada account for about 34% of U.S. exports and 26% of U.S. imports,” he explained in the report.”
Harlan Holt, visiting assistant professor of economics at Union College, believes such a move would be felt more by Mexico than the United States. “Because the U.S. is such a huge and well-diversified economy,” he said in the report, NAFTA’s “impact on U.S. GDP by most estimates has been rather small (but still positive). So the direct economic impact on the U.S. is likely negative (higher prices, lower GDP), but only modestly so.”
To judge the impact of trade restrictions on states, WalletHub used data from the U.S. Census Bureau, the U.S. Bureau of Economic Analysis, the Bureau of Labor Statistics and The Wilson Center, a nonpartisan think tank. Analysts graded states on their exports as a share of total state exports and GDP, imports as a share of total imports and GDP, and the share of jobs supported by trade with Mexico. Each of those metrics was weighted equally in the report.
