LAS VEGAS (KTNV) — Democratic state treasurers across the United States on Thursday said President Donald Trump's tariffs could raise prices for consumers, cost jobs and spark a trade war.
In a conference call set up by the group Americans for Responsible Growth, state finance officials from Nevada, Oregon, Colorado, Illinois and Minnesota criticized the Trump levies, even as the administration has delayed those tariffs on Mexico and Canada.
Trump campaigned on tariffs as a way to boost U.S. government revenue and promote American businesses, promising during his Tuesday address to a joint session of Congress that tariffs will bring in "trillions and trillions of dollars." (Experts at the Tax Foundation estimated the actual number is about $140 billion.)
"Tariffs are not just about protecting American jobs," Trump said in his speech. "They are about protecting the soul of our country. Tariffs are about making America rich again and making America great again, and it is happening and it will happen rather quickly. There will be a little disturbance, but we are OK with that. It won't be much."
But the treasurers disagreed with Trump's assessment, saying tariffs will have a negative effect on consumers in their states, as well as manufacturing and trade with foreign countries.
"President Trump is playing the role of Lucy, yanking away the football and leaving Charlie Brown on his back," said Illinois Treasurer Michael Frerichs. "That puts American consumers and small business owners in the role of Charlie Brown. This is bad policy, is bad for our economy and terrible planning."
Frerichs predicted higher prices on everything from vegetables and meat to cell phones to cars. That's driven down consumer confidence, stock prices and business expansion, as owners face the unpredictability of the tariffs and their moving target effective date.
Canada accounts for about a third of Illinois's manufacturing market and Frerichs said tariffs will push Canada to instead do business with countries such as China.
Here in Nevada, state Treasurer Zach Conine said he worries about the impact of tariffs on tourism, an industry that depends on Americans having disposable income. He, too, lamented the uncertainty he says was caused not only by the announcement of tariffs, but by the pause before they'll be implemented.
"Entropy is not a great thing when it comes to government," Conine said. "Governments are big. They should move slowly and intentionally because when we get something wrong, we get it wrong at scale."
In Minnesota, state Auditor Julie Blaha used cereal as an example of how tariffs will affect prices.
"General Mills, they buy oats from Canada, they process them in Minnesota, then they sell them back to Canada as Cheerios," she said. "So every time that crosses the border, that's another tariff."
In Colorado, Treasurer Dave Young said the state imported $6.5 billion in goods from Mexico and Canada, including computers and electronic equipment, household appliances, and machinery. Even more salient for residents, the state's only refinery is based in Canada, and oil and gas comprise the majority of Canadian imports. Tariffs mean pain at the pump, he said.
"It's a needless expense the companies cannot afford, and they'll pass on, most likely, with higher prices," Young said.
In Oregon, state Treasurer Elizabeth Steiner said trade with Mexico, China and Canada accounts for $15 billion for the state. Tariffs for raw building materials will raise the price of new home construction, which will make overcoming the state's housing shortage harder, Steiner said.
"I am deeply concerned that the administration's actions will spur increased inflation, leave cascading job cuts throughout the economy and create a long-term drag on the economy," Steiner said.
Can tariffs help American businesses?
The treasurers did acknowledge that not all tariffs are bad, and that they can actually help in some circumstances.
"Now, we should acknowledge where we can the targeted tariffs are sometimes needed to fight back when countries like China [that] don't play by the rules," Frerichs said. "The presidents of both parties have used them. But steep, across-the-board tariffs on our allies is not trade policy, it's a Trump tax."
Conine agreed.
"Conceptually, from an economic perspective, if you applied tariffs in a relatively focused and intentional manner, you could increase domestic supply of whatever that item was that you were imposing the tariff on," Conine said.
But, he said, the Trump administration's broad-based tariffs are more like a chainsaw than a scalpel, which will deter businesses from making big and potentially costly decisions about where to locate.
"If you're a business, why in the world would you put yourself in a place where you need to trust that the president is going to do the things that he said he was going to do?" Conine asked. "The only thing the president has been consistent on historically is breaking his word."
Steiner agreed, using the auto industry as an example.
"So for them to say, 'We're going to put these things on pause for 30 days and then we're going to put them all back in again.' and by then, domestic auto manufacturers should have been able to figure out all their supply chain and bring it back from Mexico and Canada so that they're not impacted is somewhat magical thinking," she said.
