Bill Text: TX HCR98 | 2017-2018 | 85th Legislature | Introduced
Bill Title: Urging Congress and the president to reject the imposition of an import tax or border adjustment tax on trade with Mexico.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2017-04-24 - Left pending in committee [HCR98 Detail]
Download: Texas-2017-HCR98-Introduced.html
85R15174 KSM-D | ||
By: Blanco | H.C.R. No. 98 |
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WHEREAS, The White House has raised the prospect of a | ||
substantial tax on imports from Mexico, but economists and business | ||
leaders have warned that such a measure would have a severe negative | ||
impact; and | ||
WHEREAS, Although the imposition of tariffs is intended to | ||
make American companies more competitive, the benefits are both | ||
limited and outweighed by numerous and substantial risks, according | ||
to economists across the political spectrum; this is the case | ||
whether tariffs are imposed directly or through a border-adjusted | ||
tax that subsidizes exports; and | ||
WHEREAS, Any border tax would hurt U.S. consumers; tariffs | ||
are effectively paid by the purchasers of goods, and as imported | ||
goods became more expensive, so would any domestic goods that are | ||
reasonable substitutes; in turn, the cost of living would soar, | ||
affecting lower-income Americans the most, as they spend a higher | ||
percentage of their income on goods, especially those produced | ||
abroad; and | ||
WHEREAS, Costs would also rise for U.S. manufacturers of | ||
products that incorporate materials made in Mexico and subject to a | ||
border tax; the enactment of tariffs could cause delays or price | ||
spikes that spiral through the economy and interrupt complex, | ||
time-sensitive supply chains; any slowdown could mean layoffs among | ||
producers and damage to the broader U.S. economy; and | ||
WHEREAS, Jobs would also be lost because of the inevitable | ||
decline in the value of the Mexican peso; the loss of purchasing | ||
power by our trading partner would lead to a drop in U.S. exports, | ||
thereby putting Americans out of work; this would cause havoc in | ||
both the Mexican and U.S. economies, according to former U.S. | ||
Treasury Secretary Lawrence Summers, now a Harvard University | ||
economist, who said that "it would be one of the best things that | ||
ever happened for Asian and European competitors"; and | ||
WHEREAS, If the United States imposes a tariff, Mexico will | ||
no doubt retaliate, resulting in a pernicious trade war; most | ||
experts believe that this would deliver a significant blow to the | ||
economy, and Peter Petri, a professor of international finance at | ||
Brandeis University, has suggested it could take years to rebuild | ||
supply chains disrupted by such conflict; Simon Johnson, a | ||
professor of entrepreneurship at MIT's Sloan School of Management, | ||
has cautioned that the impact would be "much worse than a | ||
recession," and more on the scale of a full-blown financial crisis; | ||
Princeton University historian Sean Wilentz has offered the example | ||
of the Smoot-Hawley Tariff, signed into law by President Herbert | ||
Hoover in 1930, which sparked a trade war that devastated the global | ||
economy; and | ||
WHEREAS, A border tax would be particularly crushing in | ||
Texas; Mexico is far and away our state's top trading partner, as | ||
the Texas Association of Business observed in speaking out against | ||
an import tariff; in 2015, trade between Texas and Mexico amounted | ||
to over $176.5 billion, representing more than a third of our total | ||
trade, with a surplus of $8 billion on our side; as of 2014, almost | ||
400,000 Texas jobs depended on that trade, according to the Wilson | ||
Center Mexico Institute; some Texas businesses have already | ||
suffered due to the mere threat of a trade war, which has driven the | ||
peso to a near all-time low and weakened the purchasing power of | ||
potential customers from Mexico; the effect has been particularly | ||
troubling in such border communities as El Paso, where one in every | ||
four jobs relies on cross-border trade; and | ||
WHEREAS, In 2015, Texas imported $84 billion from Mexico, and | ||
with a 20 percent tariff, businesses and consumers would have paid | ||
$16.8 billion more for the same goods and services; residents | ||
particularly depend on the availability of agricultural products | ||
from Mexico, and a border tax would drive up the cost of healthful | ||
fruits and vegetables; moreover, many large-scale agricultural | ||
concerns in Mexico are owned by American companies; and | ||
WHEREAS, Trade has historically been an engine of prosperity, | ||
benefiting consumers and businesses alike; Mexico is the nation's | ||
third-largest trading partner, and a tariff or border-adjusted tax | ||
on imports would drastically suppress commerce, to the tremendous | ||
detriment of our state and nation; now, therefore, be it | ||
RESOLVED, That the 85th Legislature of the State of Texas | ||
hereby respectfully urge the United States Congress and the United | ||
States president to reject the imposition of an import tax or border | ||
adjustment tax on trade with Mexico; and, be it further | ||
RESOLVED, That the Texas secretary of state forward official | ||
copies of this resolution to the president of the United States, to | ||
the president of the Senate and the speaker of the House of | ||
Representatives of the United States Congress, and to all the | ||
members of the Texas delegation to Congress with the request that | ||
this resolution be entered in the Congressional Record as a | ||
memorial to the Congress of the United States of America. |