Texas Businesses Bracing for Financial Hit from USMCA Uncertainty

Texas businesses are bracing for a potential financial hit due to the ongoing uncertainty surrounding the USMCA trade agreement. The state's No. 1 and No. 2 trading partners, Mexico and Canada respectively, account for 12% of Texas' economy, with two-way trade valued at $281.2 billion and $69.2 billion in 2024.

Air Tractor, Inc., a North Texas-based aircraft manufacturer, relies heavily on parts imported from Canada under the USMCA agreement. If the pact is terminated, the company's president and CEO, Jim Hirsch, estimates that he would have to increase the price of his planes by 12% due to a potential 25% tariff on Canadian engines.

Business leaders are expressing concern about the impact of trade uncertainty on investments and jobs. Tony Payan, director of the Claudio X. Gonzalez Center for the U.S. and Mexico at Rice University's Baker Institute, said that companies have long-term plans and must now adapt to uncertain investment conditions.