Trucks line up outside of the Bayport Container Terminal at the port of Houston in Seabrook, Texas, US, on Friday, Oct. 4, 2024.
Mark Felix | Bloomberg | Getty Images
Texas and California have lately been at odds over both political and economic ideologies, but when it comes to both the existing and reciprocal tariffs proposed by President Trump on Thursday, the two states have something in common: they are projected to be the biggest losers among U.S. states when it comes to the impact across states economies from the latest moves in the widening U.S. trade war.
Businesses across the U.S. will pay up to a projected and whopping $433 billion in new tariffs, according to data compiled by Trade Partnership Worldwide, led by many Texas and California companies, which will be shelling out the most in duties. That compares to a current national tariffs business bill of $78 billion, based on 2024 data. That would only occur if Trump follows through on all of his threats, including the memorandum unveiled Thursday for tariffs on trading partners that could come into effect in the months ahead.
Trump said Sunday that he planned to slap reciprocal tariffs on “every country” that imposes import duties on the U.S. “Very simply it’s if they charge us, we charge them,” he said on Air Force One, NBC News reported.
President Trump’s action for now is only issuing a presidential memorandum on the tariffs, and CNBC learned on Thursday that the tariffs would likely not go into effect for at least a few months. The White House said on Thursday that tariffs could be levied in response to VAT taxes, which are used in the EU, Canada, Mexico and many other countries, or devalued currencies. Sending merchandise through another country to avoid tariffs will lead to reciprocal tariffs as well. There was some discussion of exemptions for various industries that could be offered, according to previous reporting including comments from House Speaker Mike Johnson to Reuters, but Trump said in Oval Office comments to the press on Thursday that there will be no exemptions for any tariffs put in place.
Whether Trump will follow through on these tariffs, on which countries and in which product categories, remains uncertain. “I’ve decided for purposes of fairness that I will charge a reciprocal tariff,” Trump said in the Oval Office on Thursday. “It’s fair to all. No other country can complain.”
Howard Lutnick, Trump’s nominee for Commerce secretary, will lead studies to be completed by April 1 on the tariffs plan.
On a collective tariff basis, Texas, which went for President Trump in the 2024 election, could see an eightfold jump in tariffs paid by businesses. The tariffs paid by the state in 2024 were $7.2 billion, but with all tariffs imposed, including the delayed Canada and Mexico tariffs, that would jump to $64 billion.
Overall, companies in the U.S. will pay $43 billion relating to tariffs imposed by Trump on China using powers under the International Emergency Economic Powers Act of the executive branch, and another $11 billion in steel-aluminum tariffs. The IEEPA tariffs bill related to Canadian imports is $103 billion; while it’s $126 billion for Mexican trade; and $149 billion for EU products, according to data provided by Trade Partnership Worldwide.
While the tariff costs are paid by importers directly, consumers should expect the bill to flow through the economy.
“The tariff announcements to date could add hundreds of billions of dollars in added taxes on American companies,” said Daniel Anthony, president of Trade Partnership Worldwide. “It’s naive to think companies will — or even could — absorb such massive cost increases instead of passing them along to their customers,” he said.
The majority of the total tariffs that could be levied on Lonestar State companies relate to Mexico. If Mexico tariffs are levied on March 4, Texas state businesses would see a daily tariff charge of $108 million a day. Texas is also exposed to the steel and aluminum tariffs, for which it paid $411.7 million in tariffs in 2024, and which is now jumping to a $2 billion under the new tariff duties — or a weekly tariff of $38 million, at $5.4 million per day. In all, the Texas state tariffs bill will rise to $175 million a week, according to the dat from Trade Partnership Worldwide.
Businesses in the state of California which went for Vice President Kamala Harris in the 2024 election, will see a triple in tariff payments, with the bill to be paid projected to rise from $17 billion to $46 billion. California businesses are also the most exposed to the China tariffs, paying $12.25 billion in 2024, and with that now projected to increase to roughly $15.9 billion. That translates to a weekly tariff bill of $304.80 million or $43.4 million per day.
The amount of tariff a state pays depends on the business landscape, product consumption, and how the tariff orders are written to include any exemptions for product categories centered on certain state economies.
For example, in Indiana — which also voted Republican in 2024 — where pharmaceutical giants Eli Lilly, Roche, Bayer, Pfizer, Novartis, and other drug companies are headquartered, the tariffs businesses in that state would pay weekly EU tariffs of $239 million. In all, Indiana state businesses are currently paying $56 million in tariffs, based on 2024 data, and that total could rise to $591 million if all of Trump’s proposed tariffs are enacted and do not include exemptions for drugs.
