How would a tariff on Mexico affect Georgia? Maybe more than you think

Have you heard the latest from President Donald Trump in terms of building the wall? His plan may be to slap a 20 percent tariff on Mexican imports. Don’t know what they means? Don’t care? You may want to learn more.

Mexico is actually important to Georgia. It is now the state’s number two trade partner. As a matter of fact, Mexico is the fastest growing export market for Georgia products. (That’s increased 15.5 percent from 2014 to 2015.)

“But this is a big, thick slice of our export market,” says Economics Professor Michael Toma who is the directer for the Center for Regional Analysis at the Department of Economics at Armstrong State University.

He told us that Georgia imports to Mexico have gone up 53 percent in the past four years.

With the call for a tariff, Toma says the easiest way to understand it is that every product from Mexico you buy now (yes including booze) would increase by 20 percent. “He says if a shot of Tequila for example cost $2.00, the tariff would make the cost $2.40 for the same drink.

So if a tariff passed, we as American consumers would pay more Mexico’s products. But the expectation is that they might return in kind and put a tariff on products that the U.S. exports to Mexico.

“So, if you are an industry or are an employee with a local industry here and your industry exports to the Mexican market you could be affected by it. And that puts American jobs in export industries at risk,” said Toma.

He says that might ultimately affect industries statewide and even traffic at the Port of Savannah. “So we have fewer containers processing in and out of the port, we have fewer jobs associated with trucking and transportation here and maybe fewer jobs in warehousing and distribution,” he said.

One thing to keep in mind, most of this is just talk now. And Toma says many countries do have policies that protect their products. Yet he says we may need to learn more about what this could all mean. “But theoretically it sounds like a lot of unpleasant things could happen as a result of a trade war breaking out.”

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