With new tariffs hitting, WA tallies costs of trade war

This week’s tsunami of tariff announcements, deadlines and on-again, off-again trade talks means more uncertainty for businesses and consumers in trade-focused Washington.

The Trump administration has raised tariffs on numerous countries in recent trade deals, and is also imposing or threatening higher tariffs on dozens of others. 

That includes Canada, Washington state’s biggest trading partner, which saw the tariff rate on exports to the U.S. jump from 25% to 35% Friday. China, a major buyer of Washington farm and seafood exports, also faces higher tariffs if negotiations with the U.S. don’t result in a deal, and could retaliate with more tariffs on U.S. products.

Still, it’s far from clear how all the trade turmoil will play out for Washington.

Despite dire predictions, tariff impacts have been mixed.  

Some industries, such as shipping and tourism, have definitely been hammered by tariffs and the associated rhetoric: container volumes at the ports of Seattle and Tacoma are down, as are border crossings by Canadians into Washington. 

In other areas of the economy, such as agriculture, the effects have been muted, and in some cases, U.S. trade policy may already be helping boost exports.

Much could change as negotiations continue and as the U.S. economy grapples with other economic headwinds.

Here’s how the Washington economy is holding up after six months of President Donald Trump. 

Help wanted?

Friday’s federal jobs report, which showed a dramatic slowdown in hiring for July at the national level — and sharp downward revisions in hiring data for June and May — was bad news for Washington, where the job market was already cooling.

For the 12-month period ending in June, employment in Washington grew only around a tenth of a percent, compared with 1.1% at the national level, said Paul Turek, a regional economist with the state Employment Security Department who covers King and Pierce counties.

The state won’t have its own July job numbers for several weeks, but Turek expects further slowing, given the “eye-opening” federal jobs report, which showed only 73,000 new jobs were created nationally in July, and 258,000 fewer jobs in May and June than previously expected.

Turek emphasizes that much of the state’s tepid job growth reflects nontariff factors — notably, high interest rates, manufacturing problems at Boeing and a slowdown in hiring in the state’s critical tech sector.

But he also thinks tariffs could be a growing factor in hiring, as higher prices gradually raise the costs of manufacturing inputs, such as copper and aluminum, and erode consumer spending.

For the month of June, Seattle-area prices were up 2.7% compared with the prior year, according to federal data, in part due to tariffs’ effects on the cost of food and energy.

“Although the consumer has been pretty resilient up until now … the spending has been starting to fall off,” Turek said. “It’s surprising that it’s held up as well as it has.”

Frenemies 

One of the most dramatic impacts of Trump’s trade policy, and the rhetoric that has come with it, has been a drop-off in visits to Washington by Canadians since Trump imposed tariffs on Canadian imports and began musing about turning Canada into America’s “51st state.” 

In July, just over 116,000 passenger vehicles with Canadian license plates crossed into Washington from British Columbia — a 29% decrease from July 2024.

That’s a marked improvement from March, April, May and June, when border crossings were down an average 44% compared with 2024 levels. But it’s still enough to affect business in Washington, especially in areas close to the U.S.-Canada border.

Nearly 45% of businesses in Whatcom County said the decline in Canadian border crossings is “causing damage,” according to a May-June survey of several dozen businesses by the Border Policy Research Institute and the Bellingham Regional Chamber of Commerce.

Although future U.S.-Canada relations remain difficult to predict, “it does seem like businesses are beginning to accept that this is the new normal for now,” said Jennifer Bettis, research and program manager with the institute. 

The border spat may also be affecting business farther south. In June, hotels in downtown Seattle saw nearly 4% year-over-year declines in the number of rooms sold, occupancy and overall revenue, according to the trade group Visit Seattle.

The group attributed that decline largely to a decrease in group reservations including those related to fewer events at the Seattle Convention Center. But some hoteliers say they’re still getting fewer bookings by Canadians. 

“We’re not seeing any improvement in Canadian travel and don’t expect to for a while,” said Craig Schafer, owner of the downtown Hotel Ändra Seattle – MGallery, where bookings by Canadians are still down around 30% over last year. “They still hate Trump and are taking it out on all of us.” 

On the plus side, because Canadians account for around 4% of local hotel business, Schafer says, he reckons the border spat has shaved maybe a percentage point off total demand. 

Greg Hansen, mayor of Ferndale, said impacts on local businesses appeared to be minimal thus far, and he’s hopeful the partial recovery of border crossings indicates that Canadians’ anger at the U.S. might be fading.

Still, Hansen acknowledges that the full impacts of the border dispute won’t show up for months. “I’m optimistic, but, again, it feels like there’s still another shoe to drop.”

Ship shape

Nowhere has the volatility of the trade war been more apparent than at the state’s two biggest ports, where container volumes fell sharply earlier this year, but have since partly recovered.

For the week ending July 18, the most recent period for which data is available, the ports of Seattle and Tacoma imported nearly 14,000 containers, or just 1.7% below the average weekly volume in July 2024, according to the Northwest Seaport Alliance, which oversees marine cargo operations at both ports.

On Friday afternoon, there were a dozen shipping vessels at or near the two ports, including five container vessels, three bulk carriers and three car carriers, according to MarineTraffic.com, a vessel tracking website.

That’s an improvement from April and May, when the ports sometimes had few vessels.

Still, port officials and companies that use the ports say traffic is likely to remain volatile due to the constantly evolving trade dynamics. 

“We hear from customers the same thing we are experiencing ourselves, which is uncertainty and unpredictability,” said the alliance in an emailed statement. “With so many announcements, rescissions and changes specific impacts from any one action are hard, if not impossible, to determine.”

Grown in Washington

Some of the biggest uncertainty around tariffs is in the state’s food sector, which last year exported $7.6 billion in produce and seafood grown or processed in Washington.

Although that sector saw major losses from the trade war ignited during Trump’s first term, impacts from the current round have yet to fully come into focus.

Part of the problem is government export data tends to lag by many months, and rarely breaks out the causes for changes in exports.  

Even so, the impacts of tariffs thus far appear to be mixed.

In the first quarter of 2025, which includes the first two months of earlier tariffs and proposed tariffs, agricultural exports from the state fell 15.7% by weight, compared with the same period in 2024, according to U.S. census data. 

But it’s not clear whether tariffs were a factor in that decline, or if that decline continued into the second quarter. 

Although the state Department of Agriculture “cannot speculate on impacts of tariffs,” due to the many factors that affect export volumes, “we haven’t seen any unexpected slowing,” said department spokesperson Daniel Schafer.

That’s echoed anecdotally by several state farm industry organizations. “Tariff impacts have been few so far,” said Mark Powers, president of the Northwest Horticultural Council, which represents the cherry, apple and pear industries in Washington, Oregon and Idaho.

In fact, some farm sectors may be benefiting from the trade dispute.

In early July, U.S. Wheat Associates, which helps promote wheat exports from Washington and other states, won a commitment by Indonesia’s flour milling association to double its annual purchases of U.S. wheat, to 1 million tons over the next five years.

Although the deal was between industry groups, not their respective governments, it was clearly influenced by U.S. pressure on trade, said Casey Chumrau, CEO of the Washington Grain Commission.