20 percent ‘wall tax’ could hurt Port Arthur

Published 4:18 am Saturday, January 28, 2017

On Thursday, White House press secretary Sean Spicer said President Donald Trump would be willing to pay for his proposed border wall with Mexico by levying a 20 percent tariff on goods imported from Mexico.

Mexico represents the United States’ third-largest trading partner and, according to a state 2015 economic report, Mexico is Texas’ No. 1 trading partner.

In real numbers, the U.S. Census Bureau reports that Texans purchased $84 billion in goods from Mexico in 2015. A 20 percent tax would have added $16.4 billion to that price tag.

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So, if there is a tariff imposed on Mexican goods to pay for the wall, then a lot of Texan cash will pay for the project. Texas business leaders are not happy and are critical of the plan.

Locally, Floyd Batiste, the director of the Port Arthur Economic Development Corporation, said the tariff could be particularly painful here at home.

“When you start adding taxes and tariffs to something, its going to cost more money to get it here, and the cost is going to fall back on somebody,” Batiste said.

However, Batiste didn’t know to what extent Port Arthur would be affected by any new taxes, as he hadn’t looked at the matter.

But according to www.usatradenumbers.com, a website that reports on port cities’ imports and exports, Port Arthur’s No. 1 trading partner is Mexico (with No. 2 being Saudi Arabia though this ranking includes imports and exports). The website reports that in the first 11 months of last year, the city imported $1.2 billion in goods from Mexico—and this is down about a quarter from the year prior.

According to the Texas comptroller’s office, Port Arthur’s business dealings with Mexico are no small matter. The 2015 report, 32.3 percent of all Texas’ international trade comes through Port Arthur, and the Mexican and Saudi Arabian imports totaled just over $19 billion dollars in 2013, though the numbers have fallen in recent years as oil prices have dipped.

But Batiste said he’s not entirely pessimistic about the future. He points out that Trump’s support of the Keystone XL pipeline could be good for Port Arthur. TransCanada submitted their application to the State Department earlier this week, and if that plan is finalized, it could mean a spike in the amount of petroleum refined in the Port Arthur area.

“I don’t know if Port Arthur is ready for what’s coming, with the deregulation he’s putting in place and the pipeline, all this stuff is coming right here,” Batiste said. “These other countries don’t have a choice, in my mind, but to buy the gas we’ll be making down here, so that’s good for us.”