What Texas stands to lose in a trade war with the EU

Summary

Marketplace Morning Report Summary Episode: What Texas Stands to Lose in a Trade War with the EU
Release Date: July 15, 2025

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1. Nvidia’s Re-Entry into the Chinese Market

Overview:
The podcast opens with a discussion on Nvidia, the leading US computer chip manufacturer valued at over $4 trillion. The company has announced its ability to resume sales to China following a period of stringent export restrictions imposed by both the Trump and Biden administrations.

Key Points:

• Export Restrictions Lifted: Nvidia's CEO met with former President Trump, resulting in assurances that export licenses for selling chips to China will be granted once again.
• Specialized Chip Compliance: Nvidia had previously designed a specialized chip for the Chinese market that adhered to US export regulations but had to halt sales in April due to new restrictions.

Notable Quote:

Sabri Beneshore [01:01]: “The US computer chip maker Nvidia says it is going to be able to sell to China again.”

Market Impact:

• Nvidia's stock experienced a 5% increase in pre-market trading following the announcement, reflecting investor confidence in the company's renewed access to the lucrative Chinese market.

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2. US-EU Trade Tensions and Implications for Texas

Overview:
The report delves into escalating tensions between the United States and the European Union, particularly focusing on the threat of a 30% tariff imposed by the US on EU goods. The EU has prepared retaliatory measures targeting US exports, with Texas being a significant focal point due to its substantial trade with Europe.

Key Points:

• EU's Retaliatory Measures: The EU is poised to impose tariffs on $72 billion worth of American goods, including car parts impacting the US auto industry and aircraft affecting Boeing.
• Texas' Trade Significance: Texas stands out as the leading US state exporting to Europe, with exports totaling approximately $100 billion in goods and services such as chemicals, aerospace products, resin, and professional services. These exports support around 280,000 jobs in the state.

Notable Quotes:

Elizabeth Trobal [02:44]: “Trade supports some 280,000 jobs in Texas.”

Ray Perryman [03:01]: “That's one where it's pretty easy to start losing that business to other people because it's mostly relationship based.”

Ray Perryman [03:08]: “We have a lot of oil and gas activity, a lot of petrochemicals, a lot of more recently liquefied natural gas.”

Energy Exports:

• Dominance of Energy Sector: Energy, particularly oil, gas, petrochemicals, and liquefied natural gas (LNG), is the cornerstone of Texas’s exports to the EU. LNG exports have been instrumental in helping Europe reduce its reliance on Russian fuel.
• Potential Tariff Impact: The Dallas Fed's recent survey indicated that several energy firms are concerned about the proposed tariffs, citing increased costs and potential harm to the sector.

Expert Insight:

Ray Perryman [03:24]: “We're essentially seeding the future to the Chinese. And it's possible that 20 years from now, the US will be a kind of museum of coal-fired power plants and internal combustion engines, while the rest of the world has moved on to cheap, clean technology.”

Conclusion: The imposition of tariffs and subsequent EU retaliation could significantly disrupt Texas's robust trade relationship with Europe, particularly in the energy sector, potentially leading to job losses and economic setbacks.

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3. US Tax Law Revisions and Climate Change Policy

Overview:
The discussion shifts to recent tax cuts and spending legislation signed by President Trump, which mark a rollback of initiatives aimed at combating climate change. The law eliminates various tax credits and funding for renewable energy projects, hindering the United States' progress toward reducing greenhouse gas emissions.

Key Points:

• Phasing Out Renewable Incentives: The law phases out tax credits for solar and wind projects, electric vehicles (EVs), and home energy efficiency measures, making these technologies more expensive and less accessible to consumers.
• Increased Fossil Fuel Subsidies: Concurrently, the legislation increases subsidies for fossil fuel extraction, undermining efforts to transition to cleaner energy sources.
• Emission Reduction Impact: An analysis by Carbon Brief estimates that US emissions will decrease by only 3% by the end of the decade, a stark contrast to the 40% reduction goal set under the Biden administration.

Notable Quotes:

David Brancaccio [05:43]: “What is the bottom line for the Earth's heating climate?”

Amy Scott [05:47]: “The law is really going to slow down the transition away from fossil fuels to cleaner energy sources, at least here in the US.”

Global Standings:

• Erosion of Climate Leadership: Experts suggest that these policy changes not only hinder the US’s domestic climate goals but also damage its standing as a global leader in climate action.
• China’s Advancements: China has accelerated its clean energy initiatives, currently constructing about half of the world's renewable energy capacity and exporting solar panels and EVs globally.

Notable Quote:

Amy Scott [06:44]: “China has taken a big lead on clean energy. It's currently building about half the world's capacity and it's exporting its solar panels and EVs around the world.”

Future Projections:

• Technological Lag: Ray Perryman warns that the US risks becoming obsolete in clean technology, potentially relegating itself to reliance on outdated fossil fuel infrastructure.

Notable Quote:

Ray Perryman [07:09]: “We're essentially seeding the future to the Chinese... while the rest of the world has moved on to cheap, clean technology.”

Opportunities for Consumers:

• Limited Window for Incentives: Despite the rollback, there remains a brief period where consumers can take advantage of existing tax credits for electric vehicles and solar installations before they expire by the end of the year.

Notable Quote:

Amy Scott [07:36]: “If you want to buy a new electric vehicle, you have until September 30th of this year... your system has to be fully installed by December 30th of this year to qualify.”

Conclusion: The recent tax and spending legislation represents a significant setback for the US's efforts to combat climate change, potentially ceding leadership and technological advancements in clean energy to other nations, particularly China. However, there remains a limited timeframe for consumers and businesses to leverage existing incentives to mitigate some of the immediate impacts.

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Final Remarks

The episode of Marketplace Morning Report provides a comprehensive analysis of critical economic and geopolitical issues affecting Texas and the broader United States. From Nvidia's strategic market maneuvers and the fragile US-EU trade relations impacting Texas's economy, to the profound implications of recent US tax reforms on climate change efforts, the report underscores the interconnectedness of policy decisions and their wide-ranging effects on business, environment, and international standing.

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This summary has been compiled based on the transcript provided and is intended to offer a detailed overview of the key discussions and insights shared during the episode.

Transcript

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[Sabri Beneshore]

The company worth $4 trillion is now worth a little more From Marketplace, I'm Sabri Benishore in for David Brancaccio. The US Computer chip maker Nvidia says it is going to be able to sell to China again. That's after facing export restrictions from both the Biden and Trump administrations. The announcement came after Nvidia's CEO met with President Trump. Marketplace's Nancy Marshall. Genser has more.

[Nancy Marshall Genser]

The Trump administration had restricted sales of Nvidia's chips to China, worried they could be used by the Chinese military to develop weapons. But in a blog post yesterday, Nvidia said it's been assured the Trump administration will issue export licenses so it can sell chips to China again. Nvidia had designed a special chip for China that complied with US Export restrictions, then had to stop selling it in April after the White House imposed new export limits. Now Nvidia says it has assurances from the US Government that sport licenses will be granted and it hopes to start deliveries of the chip to China soon. I'm Nancy Marshall Genser for Marketplace.

[Sabri Beneshore]

Nvidia stock, by the way, is up 5% in pre market trading. Things are getting more tense between the US and the European Union. The EU has reportedly prepared an expanded list of ways to retaliate should the US go ahead with 30% tariffs threatened by the president over the weekend. These include tariffs on $72 billion worth of American made goods, including car parts that that's a dig at the US Auto sector and aircraft that's a swipe at Boeing. There is one state in the US in particular that exports more than any other to Europe and that would be Texas Marketplace's Elizabeth Trobal has that EU.

[Elizabeth Trobal]

Trade supports some 280,000 jobs in Texas. According to the European Commission, Texas exports about $100 billion of goods and services to Europe. They include things like chemicals, aerospace products, resin and professional services.

[Ray Perryman]

That's one where it's pretty easy to start losing that business to other people because it's mostly relationship based.

[Elizabeth Trobal]

That's Texas economist Ray Perryman, who says above all other exports, when we look at the EU Texas trade relationship, energy is king.

[Ray Perryman]

We have a lot of oil and gas activity, a lot of petrochemicals, a lot of more recently liquefied natural gas.

[Elizabeth Trobal]

And in the unlikely event these tariffs actually happen and Europe retaliates, Kishore Gawande with us WT Austin says that doesn't.

[Ray Perryman]

Make great sense from a Texas point of view because, you know, we export.

[Elizabeth Trobal]

All this LNG Liquefied natural gas is a growing Texas export and it's helped Europe decrease its reliance on Russian fuel. In the Dallas Fed's recent survey, several energy firms cited tariffs as hurting the sector and increasing costs. I'm Elizabeth Troval, Marketplace.

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[Sabri Beneshore]

The big tax cut and spending law that President Trump signed this month rolled back a lot of spending that was tackling climate change. Tax credits for solar and wind projects for electric cars and home energy efficiency all getting phased out. The law also repealed grants and other funding around reducing the greenhouse gas emissions that heat the planet. Marketplace's Amy Scott from our How We Survive Climate team has been reporting on the changes. And she spoke with my colleague David Brancaccio.

[David Brancaccio]

What is the bottom line for the Earth's heating climate?

[Amy Scott]

The law is really going to slow down the transition away from fossil fuels to cleaner energy sources, at least here in the US it phases out tax credits for things like electric cars and home EV chargers, rooftop solar panels, heat pumps, making all of those things far more expensive for consumers. Commercial wind and solar projects will also now have to meet strict new deadlines to qualify for credits. And the law also increases subsidies for fossil fuel extraction. All told, an analysis by the UK climate site Carbon Brief estimates US emissions will now drop by just 3% by the end of this decade, compared to the goal of 40% under the Biden administration.

[David Brancaccio]

All right, so we might get 3% instead of 40%. Now, where does all this leave the US versus the rest of the world? I mean, this is very much a global matter.

[Amy Scott]

Yeah, well, experts I've been talking to say it definitely hurts our standing in the world, not just in terms of climate leadership, but also economically. I recently interviewed Bill McKibben, the environmentalist and writer, and he says in particular, China has taken a big lead on clean energy. It's currently building about half the world's capacity and it's exporting its solar panels and EVs around the world.

[Ray Perryman]

We're essentially seeding the future to the Chinese. And it's possible that 20 years from now, the US will be a kind of museum of coal fired power plants and internal combustion engines, while the rest of the world has moved on to cheap, clean technology.

[David Brancaccio]

And you said some of these tax credits don't expire right away. I guess that means folks could use them if they act soon.

[Amy Scott]

Yeah, pretty quickly. If you want to buy a new electric vehicle, you have until September 30th of this year, so not much time. But that's worth up to $7,500 off a new car or up to 4,000 off of a used vehicle, depending on your income. For rooftop solar, your system has to be fully installed by December 30of this year to qualify. So experts say, you know, it's still possible. If you call around to installers, you can see how much of a credit is available to you and whether they can get you on their schedule.

[David Brancaccio]

Amy Scott hosts Marketplace's climate solutions podcast called How We Survive. You can find it wherever you get your podcasts or stream it offamarketplace.org Amy, always good to catch up.

[Amy Scott]

You too, David. Thanks.

[Sabri Beneshore]

That was Marketplace's David Brancaccio there. Our producers are Ariana Rosas and Erika Soderstrom. Our senior producer is Alex Schroeder. Our supervising Senior producer is Meredith Garretson. Morby In New York, I'm Sabri Beneshore with the Marketplace Morning Report from APM American Public Media.

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