How Trump tariffs are expected to impact Central Texas

AUSTIN - The Trump Administration's worldwide tariff plan went into effect today and experts say the new plan will likely impact businesses in Central Texas.

Trump Tariffs

The backstory:

President Trump signed an executive order Wednesday to impose reciprocal tariffs on U.S. trading partners calling it "Liberation Day".

"Foreign nations will finally be asked to pay for the privilege of access to our market, the biggest market in the world", says President Trump.

READ MORE: Stocks tumble as Trump’s tariffs roil global markets

This includes a 25% tariff on foreign automobiles an increase from the decades-long 2.5% tariff that was previously in place.  

Tariff impacts on Central Texas

US President Donald Trump holds a chart as he delivers remarks on reciprocal tariffs during an event in the Rose Garden entitled "Make America Wealthy Again" at the White House in Washington, DC, on April 2, 2025. Trump geared up to unveil sweeping n

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Local perspective:

Austin-based economist Matt Patton says consumers will be impacted locally.

"The automotive example is going to be felt right here in Texas. The number of times that automotive parts may cross the international border with Mexico might be two, three, four, five times before we have a final product rolling off the assembly line. So, each time those parts get taxed that many times over, we're going to see those types of implications", says Angelou Economics Executive Vice President, Matt Patton.

The president says the plan also includes a 10-percent tariff on imported goods.

"With that sort of fee or tax being placed on all goods, that we should expect day-to-day goods, household goods to increase in cost. It could be putting a lot more strain on our most vulnerable workers in the United States," said Patton.

Trump argues the U.S. has been unfairly charged higher tariffs on American goods.

"If you want your tariff rate to be zero, then you build your product right here in America because there is no tariff if you build your plant, your product in America," said President Trump.

Patton says the uptick in prices could come before the relocation of factories.

"Experience tells us that that takes time. And so even if there are announcements that there's going to be more construction or relocation of production facilities into the united that is going to take time," said Patton.

Trump says the plan aims to not only increase domestic manufacturing but bring in federal dollars.