In an exchange on the floor of the Mississippi Senate last week, lawmakers debated the economic uncertainty coming from the Trump administration’s burgeoning trade war and helter-skelter policy decisions.

“You never know what’s going to happen with — you know, what we’re going through with increases in cost for things, whether it’s guardrails or bolts or whatever,” said Transportation Chairman Chuck Younger, a Republican from Columbus. He was outlining a bill that would increase the amount of money MDOT could add to a road contract without rebidding from $100,000 to $250,000. This, he said, would prevent highway projects facing long delays from potential huge increases in cost of materials.

“But we’re not in COVID any more, we shouldn’t have those supply chain problems,” said Sen. Angela Hill, R-Picayune, questioning the need for the measure.

“No, we’re not (in) COVID. It’s Trump, and we’re going through all these tax things (tariffs) that are going through for other countries,” Younger said. “… It’s fixing to happen.”

Mississippi is a poor state with a fragile economy. There’s an old adage that we’re usually “first in and last out” of a national recession, and another that, “What other states call a recession, we call Tuesday.”

Some of Trump’s threatened or enacted policies, tariffs and slashing of federal spending appear tailor-made to hammer Mississippi’s economy.

But staring down the barrel of potential economic chaos or calamity, Mississippi lawmakers are not drastically cutting spending, hoarding tax dollars or even proceeding with caution. Their main focus this legislative session is a total overhaul of the state’s tax structure including massive tax cuts combined with fairly massive tax increases — an unprecedented economic experiment betting that the state’s fortunes will rise and cover the spread.

Mississippi, under one plan, would become the first state ever to eliminate an existing individual income tax, which accounts for nearly one-third of the revenue that funds state government. Increases in sales and gasoline taxes would shift the tax burden to use or consumption taxes — a move some point out would be regressive, hitting poor people, of which Mississippi has many, hardest.

What could go wrong?

For starters, Mississippi is perennially among the most federally dependent states, with more than 40% of its annual budget coming from federal dollars and the state receiving nearly a 3-to-1 return for every dollar in federal taxes it pays. The trillions of dollars in cuts to federal spending Trump and Elon Musk are promising with the Department of Government Efficiency could easily cripple Mississippi’s economy.

Agriculture is, depending on how you measure, Mississippi’s No. 1 industry. Trump’s proposed trade war with other countries and other policies could hit Mississippi farmers hard. Already, China has announced retaliatory tariffs on soybeans, chicken and other products Mississippi grows. In a smaller scale trade war in his first term, Mississippi farmers lost nearly $270 million in profits from soybeans and cotton from Chinese tariffs and fallout. U.S. taxpayers later had to bail farmers out from that smaller-scale trade war in Trump’s first term.

Mississippi might not have the direct exposure to tariffs as some states, but it is the 22nd largest exporter of agriculture products and 31st of other goods. In 2024, Mississippi exports totaled $13.7 billion, and they make up about 10% of the state’s GDP. Canada is perennially the state’s top trading partner, with Mexico also usually in the top three, and Mississippi also exports chicken and soybeans to China. Reductions in exports or other fallout from Trump’s promised trade wars with Canada, Mexico and China could be devastating for the Magnolia State.

The list goes on for potential impact of Washington’s moves on Mississippi.

Mississippi has long been in the automobile manufacturing business, with large Nissan and Toyota plants. Experts are warning Trump tariffs on Mexico and Canada could almost instantly cause North American auto production to drop by a third, cause massive layoffs and even closure of plants.

Mississippi leaders have recently celebrated several large economic development wins, including the state landing a massive aluminum rolling mill in Columbus. Mississippi taxpayers invested $247 million in state incentives to land a $2.5 billion investment from Steel Dynamics. The company’s goal is to provide more aluminum and steel for auto manufacturing, and the Columbus site will work along with satellite recycling centers in the U.S. and Mexico. While some speculate Steel Dynamics might benefit in the long run from Trump tariffs on Chinese steel, tariffs coming and going from Mexico and upheaval in the auto industry could impact one of Mississippi’s biggest economic development wins.

Another recent economic development coup for Mississippi is the Amplify Cell Technologies plant. The $2 billion to $3 billion joint venture including Daimler Trucks and China-based EVE Energy, helped by $482 million in state tax incentives, plans to produce electric vehicle batteries by 2027. Such projects were a result of Biden-era subsidies and rules promoting a switch to electric vehicles. Trump has vowed to roll back these subsidies and rules.

Mississippi has also celebrated Amazon’s commitment to spend an estimated $16 billion over 10 years to build two huge Amazon Web Services data centers in Madison County. It’s hailed as “the single largest capital investment in Mississippi history.” Mississippi taxpayers have provided $278 million in incentives and hundreds of millions in tax breaks and exemptions for the centers.

AWS is a subsidiary of Amazon, and some say AWS could help insulate it from tariffs to and from China. But the mother company is a retailer with massive exposure on about 25% of the goods it sells. And spikes in construction and materials costs on a $16 billion project are not to be taken lightly.

The AWS centers also hinge on a $2 billion to $3 billion deal with Entergy for the power company to up its game to feed the massive power needs. Renewable energy — of which Amazon is a big proponent — is a major part of that plan for powering the AWS centers. Besides that, Mississippi has seen major development in solar and wind production. Around 40 solar farms have been approved for construction and operation in Mississippi.

But the Trump administration has vowed to reverse course from the Biden administration’s policies and spending on renewable energy. This includes an executive order to suspend spending from the Inflation Reduction and Infrastructure acts, and the Trump EPA is fighting about $20 billion Biden allocated to clean energy.

Energy production and costs, at least in the short term, are in limbo like everything else with the new administration’s maneuvers.

So, apparently, is expansion of broadband internet, which Mississippi leaders have heralded as a game changer for a poor, rural state on the magnitude of electrification in the 1920s and ’30s. On his first day in office, Trump put funding for broadband expansion, including Mississippi’s $1.2 billion plan, in question with an executive order.

Trump has warned that Americans may feel “a little pain” from his economic and spending policies in the short term. But Mississippi is positioned to potentially feel great pain with an economy less diversified than others and the state struggling with generational poverty.

But Mississippi lawmakers and Gov. Tate Reeves appear nonplussed by this. They are forging ahead with one of the biggest economic experiments in history, betting that revenue largely from sources Trump is vowing to stifle will continue to grow.

Reeves has recently on social media said, “Mississippi’s economy is on fire!” There’s a potential, with looming trade wars, other D.C. policy and a state tax experiment, for that to take on a new meaning.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.