Washington state industries and consumers brace for tariff impacts

Industries across Washington state are bracing for the trade wars triggered by President Trump's tariffs on things made in Canada, China, and Mexico. Washington State Department of Commerce Director Joe Nguyễn says Washingtonians already feeling some of the impacts. He told KUOW’s Paige Browning about his concerns for the state's economy.

This interview has been edited for clarity.

Paige Browning: President Trump says the U.S. has been ripped off for decades due to bad trade deals, and tariffs will fix that. What do you make of that argument?

Joe Nguyễn: Well, first off, that's not quite how it works, but I'll just say that Washington state is one of the most trade dependent states in the entire country. We estimate about 40% of our jobs are tied to international trade. It's about $60 billion of exports that we have annually. While trade imbalances are a very real concern, tariffs have historically actually hurt our state more than they've helped.

I'll give you an example. In 2018-19 we had that trade war with China, which actually devastated our agricultural industry here in Washington state. A lot of apple and cherry growers saw significant drops due to retaliation, and we've seen that with Boeing and Airbus disputes. We know that tariffs often function as a tax on American consumers and businesses, and we found that nearly 93% of tariffs are actually passed on to the consumers, so your costs are going to go up because of it.

The past few weeks have been sort of whiplash-inducing, with tariffs on one day, off the next day. What industries in Washington are feeling the strain?

I have to check daily at this point to see what percentage or who is included. The idea that you can manage a global economy like this obviously causes a lot of anxiety and concern and volatility in business. Candidly, aerospace is one of the bigger ones that will impact us in Washington state. Boeing already has to navigate supply chain disruptions, let alone things like aluminum that can potentially increase in cost.

Our agricultural communities are the ones that I worry about the most, especially when it comes to apples, cherries, and hops, all of which depend on global exports. Technology and clean energy, too. So, part of that is their perspective now on the IRA [Inflation Reduction Act], clean energy, and also on just tariffs as a whole. Predictability is how you want to build economies. What we're seeing now doesn't necessarily help us in that vein.

You mentioned both Boeing, which is a company that would be taking goods in from other countries, with aluminum, etc., and apples, which is where we're trying to send things out. Are there other industries really at risk of financial loss here?

Oh, it's pretty widespread, right? The implications are robust. One of our largest imports from Canada, should there be a tariff on it, would be energy. So, every single business or every single individual, if there's retaliation around tariffs associated with energy, your costs automatically go up. Volatility in that market is already costing us. So, this is every single walk of life will be impacted should we have a trade war using tariffs as this weapon.

There are state levers that you're pulling, but as you said, this is going to impact a broad swath of industries. What can you do, what will you do if it's not enough?

The reality is, Washington state will not be able to fully insulate ourselves from what could be reckless policies from this administration. The trade decisions being made on a whim have a global impact. So, the best that we can do is focus on what we can control, keep fighting for our businesses, keep fighting for our workers, ensuring that we're protecting our consumers as best as we can.

But at the end of the day, the decisions made at the federal level have global implications, and they will ripple throughout our economy. But that said, we can certainly have state level economic protections. If tariffs continue to harm Washingtonians, we can push for targeted relief, which we've done in the past. But the biggest thing, candidly, that I think we can do as an administration is to keep in close contact with our communities and our businesses that are impacted by tariffs. Their guidance and their feedback is really going to drive our work, and oftentimes the anxiety is because they don't feel like anybody is supporting them right now, and we can fill that gap.

Listen to the interview by clicking the play button above.