Texas businesses involved in trade with Mexico and other countries are bracing for a sharp increase in tariffs that could start as soon as Monday. The potential 30% tariff hike threatens to hit industries that rely heavily on imports and exports, especially the produce sector, which depends on close ties with Mexico.
Since early this year, Texas companies have mostly avoided the full brunt of President Donald Trump’s tariffs thanks to a deal made in March. That agreement allowed most Mexican goods—about 85% to 90%—to skip the 25% tariffs that were initially imposed. But that protection is about to end. In a recent letter, Trump warned Mexico and dozens of other countries that tariffs will rise unless new trade agreements are reached quickly. He set August 1 as the deadline for raising tariffs on Mexican imports from 25% to 30%, with no plans to maintain the earlier exemptions.
For Texas, this is a big deal. Mexico is the state’s largest trading partner, with $281 billion in trade recorded in 2024. Across the border, the U.S. and Mexico exchanged $840 billion in goods last year. Many Texas farms and produce companies operate on both sides of the border, coordinating to keep fresh fruits and vegetables available year-round.
Dante Galeazzi, who leads the Texas International Produce Association, said a 30% tariff would be a “game changer.” The group represents hundreds of companies that grow and import about $13 billion worth of produce every year. Galeazzi worries that higher tariffs could force some farmers and importers to pull back, causing shortages in grocery stores rather than steep price hikes.
SunFed, a company that imports fruits and vegetables from Mexico into Texas, is already preparing for what’s next. Its CEO, Craig Slate, explained that the tariff costs would fall not just on them but also on Mexican farmers, stores, and shoppers. He expects some products could become scarce if the tariffs last long.
The manufacturing sector in Texas is also feeling pressure. Since June, a 50% tariff on aluminum and steel has pushed production costs higher. Now, a 50% tariff on copper is set to start August 1, adding to the financial challenges for manufacturers.
Not everyone sees the tariffs as all bad, though. Some, like U.S. Representative Tony Gonzales from San Antonio, believe the pressure is pushing Mexico to negotiate harder on trade deals, which could benefit the U.S. in the long run. Glenn Hammer from the Texas Business Association pointed out that Texas’ strong economy and stable policies could help the state weather the storm more easily than others.
Still, uncertainty hangs over the market. Many Texas business leaders are eager for clear, steady tariff rules. Delays and sudden changes make planning tough and could hurt companies of all sizes.
As the August 1 deadline nears, Mexico remains cautiously optimistic about reaching a new deal. Canadian officials are less hopeful. The next few days will be critical for Texas and its trading partners. If no agreement is reached, businesses in Texas could face significant challenges from the rising tariffs and the ripple effects on supply chains.