LSU Economist: President Trump’s Proposal To Tax Mexican Imports Could Hurt Louisiana
President Donald Trump is considering a 20% tax on Mexican imports to pay for a wall along the southern border, so what does that mean for Louisiana? LSU economist Loren Scott says if the tax is imposed, Mexico will likely up the price of their exports to the US, which means American consumers will foot the bill.
“The idea that Mexico will end up financing this is silly. What will end up happening is we’ll end up financing it by paying a higher prices for all the goods and services we bring in from Mexico,” Scott said.
Scott says that would be bad news for the economy because Mexico is America’s number two trading partner behind Canada. He says it’s also likely Mexico will impose a tax on products shipped from the U.S.
“They buy a lot of energy products from us. Their imports of natural gas are rising like crazy, and of course we’re a major producer of natural gas here,” Scott said.
Scott says anytime a country engages in a trade war with another country, it’s bad for the economy at home. He says trade wars are one of the key reasons we entered the Great Depression in the 1930s.
“We passed the Smoot-Hawley Act, and we started raising tariffs on products coming into the United States, and we got involved in a trade war that caused our exports to decline by two-thirds,” Scott said.