President Trump’s threat of imposing tariffs on Mexico goods has the US businesses, lawmakers and investors worried as they fear it will have a huge adverse impact on the job scenario and lead to an economic slowdown. An analysis conducted by an economic consulting firm, The Perryman Group stated the job loss figure to be in the range of 400,000 or so.
The threat of tariff imposition given by President Trump in order to propel Mexico into stringent enforcement of immigration laws is nothing short of an economic gamble, said leading economist, Ray Perryman of the Perryman Group.
Job losses to hit Texas alone would total 117,000 in number while the retail trade segment would face another 136,516 job losses. Manufacturing sector would lose yet another 50,000 jobs and this would not include the economic pain that would occur if Mexico were to impose retaliatory tariffs. Repercussions would also include an estimated loss of $41.5 billion in GDP for the country considering the multiple effects.
Another economist at PNC, Gus Faucher stated that the 400,000 job loss number was lesser in the larger context of tensions escalating with China and Mexico. At the same time it seemed a bit overestimated in view of a forthcoming rate cut from the Federal Reserve which would lead to job increases albeit in the lower-earning segments.
The estimate of 400,000 could also prove to be on the lower side if the entire 25% tariff threat from President Trump turned into reality as per the opinion of senior economist at Ameriprise. In addition, the US auto industry would be the worst hit considering its dependence on auto ancillaries from Mexico.
One of Trump’s trade advisers however, has indicated that the threat may not need to be carried out at all because they had shaken up the Mexicans which were what they wanted.