Salt Lake City—With one in four Utah jobs supported by international trade, Utahns should take a special interest in the rhetoric coming out of Washington, DC—especially in regards to our country’s relationship with Mexico. Derek Miller, CEO of the World Trade Center Utah, spoke at a Newsmaker Breakfast event yesterday at the University of Utah’s Kem C. Gardner Policy Institute, where he stressed the importance of international trade to the Utah economy.
Utah is the sixth-fastest growing export state in the nation, said Miller, because Utah businesses are not afraid to get engaged internationally and sit on a vast store of natural resources, from metals like gold, silver, copper and iron, as well as coal. And while the state heavily trades commodities with our No. 1 and 2 trade partners, the U.K. and Hong Kong, many Utah exports other than commodities go to our neighbors to the north and south.
“[The UK and Hong Kong], that’s where the legers are kept for commodities,” said Miller. “But when you talk about the things that you and I usually think about for exports? It really is Canada and Mexico.”
According to figures provided by the Kem C. Gardner Policy Institute, the value of Utah’s 2016 exports to Mexico was $741 million, a figure which has tripled in the past decade. Utah imports $3.3 billion in goods from Mexico, which ranks No. 1 for the Beehive State’s import origins.
With the current administration promising to introduce an import tax or a border adjustment fee, renegotiate the North American Free Trade Agreement (NAFTA) or construct a wall along the southern border, Utahns and Utah companies may be the ones paying a hefty price. In scenarios run by the Institute’s economists, a 25 percent export reduction with Mexico would account for 1,329 jobs lost and $135 million lost in the state’s annual GDP. A 20 percent tariff on imports would account for 5,568 jobs lost and a reduction of $394 million in Utah’s annual GDP.
“A trade war is like a regular war. There are no winners. It’s bad for everyone, all the way around,” said Miller.
And in looking at the three ideas the administration has considered to pay for the border wall—a flat 20 percent tariff for Mexican imports, a border adjustment tax (jokingly called a “tariff-no-tariff”), and dipping into remittances sent from Mexican families in the U.S. to others in Mexico—all are complex and could lead to greater consternation between the two nations, with Utah consumers and businesses dangling in the middle.