Texas Chamber Business News

Texas’ Trade Leadership is Critical to Global Dominance of the North American Economy

Author

Texas Chamber Business News
February 04, 2025

International trade is critical to the Texas economy, which is now the 8th and soon to be the 7th largest economy in the world, having already surpassed global economic powerhouses like South Korea, Russia and Australia. As the nation’s top exporting state for 22 consecutive years, Texas thrives on robust trade relationships that fuel economic growth, support millions of jobs, and ensure the competitiveness of Texas businesses in the global market.

Five years ago, President Trump successfully negotiated the U.S.-Mexico-Canada Agreement (USMCA) – by far the best trade deal ever – with the unanimous support of every single member of the bipartisan Texas Congressional delegation. Since that time, this landmark agreement has fueled record-breaking trade and job growth in Texas. In fact, just under half of all Texas exports are to our partners in Mexico and Canada.

As we approach the agreement’s formal review process in July 2026, ensuring the USMCA is not only maintained but further strengthened is critical to the state’s continued economic success. To ensure the Texas business community has a leading voice and keeps its important seat at the negotiating table, the newly created Texas Leads Trade (TLT) coalition will:

  • Defend Texas’ position as a global trade leader

  • Reject policies that undermine economic growth

  • Invest in border infrastructure and security

  • Promote trade agreements that drive growth.

With these long-term goals in mind, it is important we focus on maintaining economic prosperity in the near term while also addressing the immediate challenges of illegal migration, border security, and the pouring of illegal drugs into our communities. As I told the Rio Grande Guardian last week:

“We feel that we can accomplish those goals while increasing our prosperity through the contours of the U.S.-Mexico-Canada Agreement, which, at its base and at its at its most fundamental level, calls for tariff-free trade, tax-free trade in North America.”

At the beginning of this week, President Trump and Mexican President Claudia Sheinbaum successfully came to an agreement whereby Mexico has agreed to enhance security at the U.S.-Mexico border, delaying any imposition of tariffs until next month, at the earliest. Shortly thereafter, Canadian Prime Minister Justin Trudeau announced that he had arrived at an agreement with President Trump to implement strategies to enhance security at the U.S.-Canada border, also delaying implementation of any tariffs by at least 30 days.

We applaud this important progress, as tariffs would only increase the price of groceries and gas, which affects all Americans but will disproportionately impact Texas as the most important state in the North American trading bloc.

Beyond the immediate concerns surrounding tariffs, Texas should double down on USMCA’s benefits—modernizing infrastructure, securing supply chains and keeping Texas as North America’s trade powerhouse.

The Texas business community is equally committed to maintaining and enhancing our North American trade relationships. During a recent panel I moderated in the Rio Grande Valley, Border Trade Alliance (BTA) Chairman Pete Sepulveda made clear that maintaining a tariff-free North America is critical to the competitive edge of the region and our entire state:

“At the end of the day, we know that tariffs are not a good thing. We’ve all seen what NAFTA did to the Rio Grande Valley, what USMCA has done. So, we don’t want to take a step back. BTA will be at the table during the review of the USMCA and we will do whatever we can to advocate for no tariffs.”

Dante Galeazzi, president of the Texas International Produce Association, emphasized the staggering impact of the region’s trade activity, particularly when it comes to healthy, affordable produce grown and transported across the Texas-Mexico border region:

“The RGV is where 70% of Texas’s fruits and vegetables are grown, in addition to where most of the fresh produce coming from Mexico is crossed. More than 9 billion pounds crosses from the international bridge…we’re talking about an economic impact to the state of roughly $25 billion.”

Texas also exports $35.9 billion in goods and $4.4 billion in services to Canada each year, while our neighbors to the north import approximately $37 billion in goods annually to the Lone Star State. Whether it’s the energy and technology industries, rare earths and critical minerals, semiconductors, or advanced manufacturing, trade with Canada has been key to supporting Texas’ innovation economy and further integrating our supply chains.

In North America, we now build things together. From auto manufacturing to aerospace and computer electronics, we build modern manufacturing marvels with our friends north and south. This important dynamic has played an important role in reshoring global supply chains away from East Asia, establishing Texas as the undisputed centerpiece of the North American economy and allowing us to more strongly compete against an ascendant China.

Texas wins with trade, and we want to do everything possible to maintain tariff-free trade with Mexico and Canada. As we look at the longer-term USMCA review process, we hope to find ways to further reduce non-tariff barriers so we can have an even more seamless trade with our North American trade partners and position Texas businesses large and small to better compete on the global stage.

To listen to my full interview on the core goals and key principles of TAB’s Texas Leads Trade coalition, click HERE.

Glenn Hamer

President and CEO - Texas Association of Business

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