In what has become a grueling economic ritual, companies, farmers and other commercial players in Washington are again scrambling to assess the costs of another round of tariffs by President Donald Trump.
On Wednesday — or “Liberation Day,” as Trump calls it — the president announced his latest trade policy salvo: a system of “reciprocal” tariffs that would tax imported goods based on charges that other countries impose on U.S. goods.
For example, imports from China, which imposes tariffs of 67% on U.S. goods, will now be tariffed at 34%, according to a chart Trump shared Wednesday. Goods from the European Union, which puts a 39% tariff on U.S. goods, would be tariffed at 20%. Trump also set a minimum tariff of 10% on any imports.
“That means they do it to us and we do it to them,” an ebullient Trump explained at a news conference in the White House’s Rose Garden. The president said tariffs will force foreign countries to take more American exports and help restore American manufacturing.
But experts worry Trump’s new tariffs — essentially taxes paid on imported goods by U.S. buyers — will also “do it to” many Americans.
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That’s especially true for a trade-dependent state like Washington, where an estimated 1 in 4 jobs are tied to international trade and where exports of everything from wheat to apples to airplanes account for 10% of all state income, according to state commerce department figures.
Consumers, certainly, will feel the bite.
On top of Trump’s previously announced tariffs, including a 25% tariff on certain imported cars and imported car parts that goes into effect Thursday, the new tariffs are expected to raises prices on many products.
“Washington will be one of the hardest hit [states], because we’re one of the most trade-exposed, and you’re going to see it in your monthly bills,” said Joe Nguyễn, director for the Washington Department of Commerce.
“It’s just going to be a substantial impact on consumers,” added John McCarthy, commission president for the Port of Tacoma, which will bear the brunt of Trump’s tariffs on auto imports.
Tariffs will also likely make business more expensive for Washington producers that rely on foreign oil and other inputs.
Wheat farmers, for example, are already paying so much for fuel and fertilizer, much of which comes from Canada, that many “will not be making money” this year, said Casey Chumrau, CEO of the Washington Grain Commission.
But the bigger fear is that these new tariffs will spark additional retaliatory measures from trading partners, much as happened when tariffs Trump imposed in 2018 led to an all-out trade war.
In Washington, overall exports of goods produced in-state are still down by nearly a third, in dollar value, from where they were before Trump’s 2018 tariffs and the pandemic recession in 2020, according to state Commerce Department figures.
Trade Deadline
Washington‘s imports and exports still haven‘t fully recovered from the pandemic and tariffs imposed in President Trump‘s first term.
Note: Import and export figures also include products passing through Washington ports but originating in or bound for other states.
Source: Federal Reserve Bank of St. Louis (Chris Kaeser / The Seattle Times)
Washington exports down
Exports of Washington-made products are still down 32% from their pre-2018 levels.
Source: WA department of commerce (Chris Kaeser / The SeattleTimes)
“This kind of nonsense is toxic,” said aerospace expert Richard Aboulafia, managing director at AeroDynamic Advisory, of the tariffs’ potential impacts on companies such as Boeing, which he estimates sells 80% of its commercial jets abroad.
In 2024, exports of civilian aircraft, engines and parts by Boeing and other companies in Washington’s aerospace industry were still barely a third of their 2017 levels, according to state data, though that also reflects Boeing’s many other challenges.
Trump’s new tariffs brought cheers from the partisan crowd in the Rose Garden. That included a number of auto industry workers, who shared Trump’s view that tariffs are necessary to restore a U.S. manufacturing base decimated by cheaper foreign competition.
But the new tariffs drew sharply critical reactions from Democratic lawmakers, and state and local officials.
“We certainly think it will cause a major trade war,” said U.S. Sen. MariaCantwell, D-Wash., noting that the expected consumer price increases come “at a time when inflation is still a very sensitive issue.”
Democrats conceded they had little leverage to challenge Trump’s trade policies.
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“It’s a tax on the American people [but] Republicans in Congress refuse to uphold congressional authority and have a vote on this important issue,” said U.S. Rep. Suzan DelBene, D-Medina, during a news conference Wednesday.
Tariffs could also undermine America’s economic advantages in an increasingly competitive global marketplace.
America’s trading partners can “buy from a lot of other countries around the world,” said Lori Otto Punke, president of the Seattle-based Washington Council on International Trade. If the U.S. is “stepping back from trade, there is a huge vacuum that will be filled by others.”
As with previous tariff rounds, businesses face huge uncertainty over how long these new tariffs will be in place or whether they’re mainly intended as a tough opening move in trade negotiations.
But some businesses expect to pay substantially more for imported products and materials and, depending on how long the trade dispute lasts, will almost certainly need to pass some of those increases on to consumers.
“The longer that these tariffs are in place, you could see costs going up for a longer period of time,” said Cameron McKinnon, owner of Confluence, a Seattle-based homebuilder. That means “house prices going up in the long run.”
Some of McKinnon’s suppliers have warned of lumber price increases of “upwards of 20-plus percent,” which depending upon the size of a home could boost the cost by “anywhere from $10,000 to $15,000,” he added.
Timothy Nadreau, an economist at Washington State University, worries about another perverse tariff outcome: if Washington farmers get blocked out foreign markets, they’ll likely dump their crops on domestic markets, which will depress prices and likely leave some farmers bankrupt.
But he worries the Trump administration may use a price crash as proof tariffs actually curb inflation, in effect, saying “the Biden administration gave you inflation and look, we brought the prices back down with our tariffs.”
Yet that price relief is “a short-run effect,” Nadreau said. And in the meantime, the state will see lower export earnings and slower overall economic growth, “not to mention the fact that it probably puts a lot of farmers out of business.”
Paul Roberts: proberts@seattletimes.com.