Northwest now is supported in part by viewers like you.

Thank you.

But we will charge them approximately half of what they are and have been charging us.

So president Trump announced a boatload of tariffs on Liberation Day last April.

It tanked the stock market and threatened to shut down supply chains.

But then came a long series of on again, off again adjustments that have made planning for both large businesses and small just about impossible.

Now, Washington state Treasurer Mike Pelliciotti worries that tariffs could cost the state more than $2 billion in general fund revenues by the end of the Trump administration's term.

We'll hear from him and the president of the Washington roundtable, Rachel Smith, tonight.

Our Steve Kiggins shows us how it's not just the multinational mega-corporations feeling the heat from tariffs.

Tariffs are the topic.

Next up northwest.

Now.

Music Political leaders here in Washington state hate just about everything Donald Trump does.

So bear that in mind.

But even traditional center right constituencies like business leaders are worried about tariffs and the outsized impact they could have on Washington state.

One estimate says tariff cost for the state's businesses could go from about $2 billion to $20 billion globally.

Standard and Poor's says tariffs have cost global businesses about $1.2 trillion, with about two thirds of what essentially is a tax on supply chains hitting consumers directly.

As one example, grocery prices are up 16% as importers lose the ability to eat the cost.

And major economic drivers like agriculture and aviation risk losing export market access in countries that have only recently opened their doors after years of intransigence.

In addition to the direct impact of tariffs, the number of knock on effects are almost limitless, including putting about 32,000 trade dependent jobs at risk.

As Steve Keegan shows us now, it's not just the state's largest corporations feeling the impact of tariffs.

Political tension is like shifting tariffs, and the threat to Canada has squeezed the number of people willing to cross.

Washington State and British Columbia border.

Statistics Canada reveals the number of Canadians choosing to travel southbound has been on a steady decline for the past eight months.

In fact, down 34% between August 2025 and August of last year.

And that's bad news if your business is used to serving our neighbors to the north, where we are really going to be in a world of hurt between now and the end of the year.

You're putting the finishing touches on Rainier Valley food banks new home team moved in just weeks ago through 2024.

Everyone kept pace to meet the 40% growth in the weekly home delivery program.

Executive Director Gloria Hatcher Mays calculates tariffs will lead to significant increase in cost next year.

We've spent about $700,000 on purchased foods, and we're expecting with when the tariffs are fully implemented, that that's going to go up to over $1 million next year.

This is going to impact people all across our state.

In September, governor Bob Ferguson highlighted details from a Washington state office of Financial Management report analyzing the Trump administration's 2025 tariffs.

The report predicts tariffs will raise costs for vehicles, groceries and clothing cost thousands of jobs across multiple sectors and stunt GDP growth, leading to weakening state revenues.

When we receive coffee now, we are constantly just worried about what that final price will be.

References are Owens, boon, Boone, a coffee which sources beans globally.

He says tariffs have chilled dreams of expansion.

When it comes to, you know, do we expand further beyond where we're at?

It is definitely something that we hesitate about.

We're a very connected region.

Despite the border, a recently published brief by the Border Policy Research Institute at Western Washington University revealed tariffs and threats to annex Canada has fueled a damaging boycott for lease notices, hanging and empty storefronts, and blame.

Our sign that border communities still struggling to recover from the Covid 19 pandemic are uniquely vulnerable.

It's an opportunity to to really think about what it means to shop local to support local business.

The tariffs, they're out of control.

Acoma owner at northwest the Orange and Mercantile in Bellingham, says tariffs forced price increases on imported fibers, leading to customers scaling back projects and Canadian customers avoiding travel altogether.

Most of them have simply chosen not to come south, and I think that's an understandable situation in the North Sound.

Steve.

North northwest.

Now.

Joining us now are Washington State Treasurer Mike Pella and Washington roundtable president Rachel Smith.

Mike and Rachel, thanks so much for coming to northwest.

Now have a conversation about tariffs.

We hear a lot about them.

We know they're incredibly important and people are feeling the effects of those tariffs.

But I think this is a great chance to explain a little bit about what they are and how they possibly impact not only business and families and, the state government as well.

Mike, let's start with you.

Give us take me to tariff 101 school.

What is a tariff and who ends up paying this thing?

Well, look, I mean, a tariff is a tax.

It's more specifically usually an import tax that is paid by the importer.

And then it's passed along to the consumers as a form of that tax.

You filed an amicus brief in court and ask Congress to step in.

And, you've been working on sounding the alarm about this a little bit.

As revenues potentially declined for both, you know, importers who are paying the freight and exporters possibly losing share overseas.

What do people need to know about that?

What kind of a warning are you sending in?

What would you like lawmakers to do?

Well, I'd like Congress to do its job.

Congress is actually responsible for determining whether there should be a tariff.

And not all tariffs are bad.

Sometimes you can use them for national security reasons and other things.

But the way that we've seen these tariffs implemented over the last several months have been kind of reckless and illegal, which is why I joined with the governor to bring forward the legal argument, to challenge the way those tariffs have been imposed.

And ultimately, if it's we can get tariffs back on the way that they've been in the past, which is actually targeted, not reckless, not waking up any given day to a new tariff in a different amount in a way that businesses just can't do it.

No matter who you are, you can be the best entrepreneur in the world.

You can't respond to that type of chaos.

And the more problematic aspect is it's squeezing businesses from both sides, like squeezing them on the production side where they're paying more for the goods and then they're turning around.

They can't even sell the goods that they have, because a lot of that used to be sold overseas, especially an export heavy state like the state of Washington.

And then I'll just finish up by saying the biggest concern is who pays the bills.

And the reality is it's consumers and they're getting squeezed enough.

We need to be doing all we can to make it easier and lower the cost of living for folks, not increase it, which is what tariffs are doing.

Rachel, you're kind of an interesting position here, being a spokesperson for the Business Roundtable.

But but again, also having this being a very consumer facing issue.

Normally you're kind of over here, but now you're having to take kind of a broader look at this, I think to some degree to and the impact on folks.

What is your organization doing?

I would say one of them is being here and doing some public education.

That's that's one of the roles.

But what else are you able to do with the roundtable and to get the message out?

And what exactly is the Roundtable's, message holistically when it comes to tariffs?

Yeah.

Well, I would just start by, agreeing completely that tariffs are taxes and that, they're an old idea that is hurting, Washington state employees, raising costs for consumers and their families.

And, just to emphasize what was already said, inject so much uncertainty.

And that is the real killer for many businesses.

Is that uncertainty?

The Washington roundtable, we are working with our businesses, understanding the impacts that they're feeling so that we can share those with lawmakers and with policymakers.

We are, trying to provide tools and resources, that we can and, I just want to take this opportunity to say thank you to our, state lawmakers who are, doing the work that they're doing.

You know, we need to ensure that we are pushing back on anything that is illegal or anything that would seek to undermine, our competitiveness here in Washington state.

Great segue to something I wanted to expand a little bit, Mike.

Why illegal?

What is the legal argument?

Well, the legal argument is that our Constitution is clear that Congress determines tariffs.

It actually is kind of foundational to our country, the Boston Tea Party, that involved tariffs on tea.

And so when our Constitution was written, our founders said Congress determines whether there are tariffs.

What we have is the president on his own initiative any given day to spending out, depending on what his desires are that day, implementing tariffs in a reckless fashion.

And that's the unlawful action that's taking place.

And, you know, I don't mean to get in the weeds, but essentially what our legal argument is talking about is there are certain very emergency situations where the where the president can impose certain tariffs.

And that's when there's an emergency, if there's dumping, there's some or something truly.

Yes.

Like that.

Or truly in a crisis situation where there is a need for national security.

I think what we're seeing is we're not seeing an issue of national security.

We're seeing an issue that on any given day, based on his desires or his relationship with a world leader, he is changing the tariff scheme.

Our entire constitutional framework doesn't allow for one person to have that type of control.

Because guess what?

It hurts consumers.

Everyday.

Americans are now looking at paying 5 or 10 or 15% more for household goods, for food, for groceries.

It's it's so erratic and chaotic.

That's the problem.

And that's what our Constitution is meant to protect.

And that's the legal argument the government are putting forward to use you either.

If you had, I'll ask you first.

Rachel had much contact with with families.

I know you're obviously very involved in the business community speak with and I and I do too.

I just threw a quirk, have a lot of conversations with small business owners in western Washington.

So I think, you know, that's a conversation we have fairly frequently.

But actually street level conversations with families, any reporting or any research there that's giving you any insight into what, you know, typical people are experiencing?

Yeah.

Well, the people that are, owning, operating, running our small and large businesses, our families, they are families here in Washington state.

So, yes, we certainly hear from them, not just about the impacts that it's happening having on their business, but the impact it's having on their kitchen table and the sort of kitchen table issues.

And, you know, we there is no question that costs are going up and that inflationary pressures are growing.

So yes, we hear that in addition to the business concerns all the time.

So obviously, you know, I don't want to sound cynical.

The state wants a nick on everything, Mike, as you well know.

So not only is this a business and a family issue, it's also a state revenues issue.

And, talk a little bit about the threat there.

And, you know, we have a large new tax package that's that's been implemented.

But this is another tax, as you stated previously, when you took us to tariffs 101.

Talk a little bit about about that.

And and the impact of this to the state government and the from a planning perspective for even for lawmakers, going into the next budget cycle, we're going to have a supplemental.

But even after that, trying to trying to figure out what it is they've got to work with.

Well, look, I think consumers are getting squeezed in all directions right now.

And I think it's important to to recognize that impact.

But it's also important to recognize the scale of what's taking place, because you were mentioning some of the revenue that the legislature determined or decided to pass last legislative session.

Well, in a situation like that, that could be, you know, a couple additional pennies on $10, you know, a $10 service fee, for example.

Look, I will be the first as treasurer to say pennies add up.

When you when you look at that.

But when you talk about tariffs, the numbers we're looking at are more like 10 or 15%, meaning that's an A dollar, a dollar I heard ten x know and potentially more.

I'm being conservative as we look at the numbers specifically in Washington state.

Very conservative.

Well, that's an extra dollar 50 for a consumer on a $10 purchase.

The scale is so significant.

And that's what's leading to the chaotic approach of you mentioning small businesses.

Like, I talked to folks who own coffee shops, who are looking at numbers just dramatically increasing in terms of their their import costs on coffee, things that we don't grow here in the United States.

Right?

I mean, things like bananas, I mean, like they're just foundational things we import that will increase the cost for consumers.

And like I said, folks are getting squeezed right now and government need to be doing all it can to be reducing the cost.

On consumers.

Yeah.

And this is so erratic and so chaotic, we're just starting to see the impact.

So to answer your question directly, that also then lowers the revenue for the state where they're talking, you know, recent report by the Governor's Office of Financial Management was saying a couple billion dollars just over the next couple years in decreased revenue.

We're seeing this already with a couple hundred dollars lower in revenue projections for for the budget.

What I will also say is, unlike tax revenue that the state is imposing with the money that stays here in the state of Washington to serve state needs, this is money that is being extracted from Washington tariffs or money being extracted from Washingtonians and sent to DC.

And we don't see that same impact here in the United States.

So it's money actually getting sucked out of our state, going to DC opposed to at least, you know, the tax revenue that the legislature determined to pass that will be staying here in our state.

Rachel, we've talked a lot about importers in the costs of getting your goods, here in an import dependent state, either to be sold here, to be sold elsewhere around the country.

And I've talked recently with a small business owner who that's a big piece of what they do is importing, but they also export.

And luckily they've been able to find other markets that aren't quite as tariff, impinged as Asia is.

And they've been having some success in Europe and other places to help offset that.

Not everybody has that, though.

If you're a small business here and you're selling your product here locally, you're getting hit with the import tariffs.

But I also want to talk a little bit about the threat to our export markets.

You know, I spent a lot of time as a cub reporter in Yakima, where they're trying to open up Cherry Markets and open up Apple markets.

And Boeing, what a $17 billion worth of product.

And about 19,000 jobs at stake on the export side.

Talk a little bit about that.

And do we tend to kind of forget about the export side and retaliate retaliatory actions when we're talking about how the cost of groceries is going up on the import side?

Absolutely.

I do want to just comment briefly on the previous question around, you know, I think businesses are kind of getting a double hit right now as well.

So they're dealing with tariffs.

But also, you know, these were the largest tax increase in Washington state history this last session.

And so they're feeling it on both sides of the kind of big economic moves happening in a number of them.

Wage inflation.

Yeah.

Are really impacting businesses.

So just wanted to kind of emphasize that.

And then certainly we're the most trade dependent state in the nation.

So, so everything that you're describing in terms of both imports and exports is real.

And the other thing I would say is that, you know, it is if we lose some of those markets, it's going to take a very long time for us to build that back.

I say often, you know, it's really easy to kind of tear those things down.

It takes a lot longer and it is a lot harder to build them back up.

And just in the New York Times today, I mean, this is just sort of the irony, reading a piece about soybeans and saying, you know, we have China is no longer buying soybeans here from the United States.

So we're actually going to use taxpayer dollars to subsidize the soybean growers.

And that also doesn't make a lot of sense when instead we could be actually net bringing dollars into our country.

So yeah, I think there's sort of risk across the board.

Yeah.

And China, just to use an example, that mouse will will hunt another, find a cheese down another pathway.

So if the tariff, if we all said all oxen free and the tariffs were off tomorrow, it doesn't necessarily mean, oh all our, all our customers roll back in the door and everything's fine again.

Right.

They found another way.

And again that's part of the uncertainty of it all that that is a real challenge for business.

And I think you hit on it's one of the things Rachel is really highlighting is we are an export and import Yobe State.

We are truly a trade dependent state.

The good news is we have a diversified economy, right?

We have one of the most diversified economies in the state.

U.S.

News and World Report now, for the second year in a row, has rated Washington state number one in the nation for long term fiscal stability.

Our credit ratings are stronger than the federal government's.

All of that is good.

But it's exactly to your point.

We need all that to weather the storm that is that is coming because if production costs are 90 or fertilizer, 90% of our fertilizer comes from Canada.

You mentioned agricultural impact.

Well, that's affecting the cost of production.

At the same time, if you're an apple farmer and you were sending your apples to India, well, now you have a problem on the export side.

At the same time, your margins are tight.

The agriculture Boeing, you talk about that impact shellfish farmers on the peninsula.

And we talk about, you know, those doing coffee.

Literally every aspect of our economy is getting squeezed.

And folks who are going to be left paying the bill are the consumers, and they're the ones who can afford it the least.

Any way to take the sharp edges off of that?

From from a state perspective, you know, a cynic might say, yeah, you know, let's let's take let's take the tax increases and put a temporary let's curb them temporarily to help business, continue on in this era of tariffs.

Obviously, that's not going to happen as much as Rachel.

She won't tell me that.

But as much as she might like I will okay okay.

Fair enough.

But is there anything that can be done from the state perspective to take the sharp edges off this?

Are we just got to sit here and be victims?

Okay.

Well again, that's why you have a treasurer who is fighting to take this tariff issue on because of the impact.

But I really want to focus again on the scale that the scale that we're talking about, of the cost through these tariff taxes is so dramatic, not just to consumers, but to businesses, that there's no way really to make that up.

And I think that is where it's particularly hard.

And you might have particular sectors of the economy where the president might say, oh, I'm going to try to use I mean, we say use tax dollars, but reality, they're just taking out more debt federally to, to to pay that.

And that's, that's not sustainable.

None of that sustainable that the, the best way to fix this is for Congress to do its job, retake its control over tariffs, which is what the Constitution says they have to do, and have the president make sure he actually follows the will of Congress.

And if you brought this vote to Congress, I know how Congress would would vote.

They would get rid of these reckless tariffs overnight.

Yeah.

Because the harm that's going to do, and I think the president ultimately will do too, once he once the public has an outcry in terms of the the economic harm that we're going to see over the next several months from this, I think the other thing is, you know, we share the same goal.

Absolutely.

And, I think the other thing that we can do here in Washington state is to really think about our own economic development future, our own economy here in Washington state and really plan together business and government to say, what can we do to strengthen that, to make it stronger, even in the face of some of the things that are harder to control?

If I don't let you take away the new revenues and I don't wave a magic wand.

To fix the the tariff problem, are there any other policy solutions or things that can be implemented out there?

What do you when you guys sit with your your members and talk this out, hash it out.

Is there anything other otherwise that can be done?

Again, I think there's very little that Washington State is not already doing that they could be doing to address tariffs at the national level, but I do think that there is opportunity for us to think about, again, strengthening our economy here at home, thinking about where we want to invest here locally and do no harm.

Right?

We don't want to make anything worse.

So we don't want to, bring additional pressures to business if we can help it.

And I think, you know, we we can't make things more affordable by making them more expensive for consumers.

So I think we need to put that lens on all of our policy decisions in the next coming couple of years.

Translation taxes.

So that's one of them for sure.

Okay.

Take me in the room a little bit.

I'm going to ask this to to both of you.

Mike.

You don't have to name names or companies or anything.

Are you having any meetings with companies who are walking into cabinet meetings and saying, listen, here's where we are now.

Here's where I see us in a month or two months or six months.

I'm not liking it.

What's what's to talk about those companies?

Look, I've been to each of our 39 counties.

I talk to folks all around the state, and I mentioned that even though we have a diversified economy, especially compared to most other states, every aspect of our economy is going to have an impact from this.

The agricultural sector I was talking about throughout central and eastern Washington, I was in Pasco talking about just this impact that we're going to see on farmers.

We could lose, growers we could lose.

Oh, well, I mean, they're getting squeezed as it is.

Look they have employment challenges.

You know they have you know, in addition to the cost of production, like I was saying, fertilizer, I mean, we're on the Canadian border.

It's stuff comes in from Canada to allow us to do these needs.

Our energy significantly comes in from Canada.

I mean, all of these things are going to increase the cost of production.

Yes, yes.

Aerospace.

Yes.

On the peninsula.

Look, I was in Port Angeles, so the Port of Port Angeles talking to the leaders there, they were talking about just within the first couple months, a 30% decrease in tourism for Canada.

Don't even get me started on Blaine and Linden and Bellingham and just how potentially catastrophic that is.

Yeah, for the economy.

And the 30% hit, you can that's that's less than a year probably in terms of sustained.

And that was in the first couple months that I was there.

Yeah.

So I look I don't think names would be coming down here to look I spent a year doing my graduate studies in Canada.

I actually had I have a lot of Canadian friends.

The level of betrayal that they feel for American foreign policy, and these tariffs in particular is like nothing we've seen in a lifetime.

I'm chuckling because I played golf just on a pickup round.

You know, you get assigned a twosome from Canada.

And then they were and we had a very interesting conversation.

And I was like, you know something we we like Canadians.

Please, please remain calm.

If we weren't playing them at T-Mobile, I don't think they would have come down at all.

Right.

You know, but but I also say this, I mean, the impact is significant.

You know, speaking of T-Mobile, I mean, the estimated job loss from the president's tariffs is about 33,000 lost jobs just in the state of Washington.

We're expecting to receive just because of this tariff policy.

That is more than the average attendance at a T-Mobile Seattle Mariners.

Yeah, just to give some context of the jobs are going to be lost purely through this economic policy.

It's a self-inflicted wound.

That's why I'm working together to bring this lawsuit, bringing this legal argument to challenge that.

Rachel, I'm painting the same picture for you.

We're we're in Olympia at the at the roundtable with a meeting with your your members and a Q and A, and I know these happen down there, and they're not for public dissemination.

And I understand and respect that.

So you're not to provide names or anything.

Can you give me a sense of what the discussion is in that room.

Are there people saying, listen, this is going to end us or, or this, and we can hang on for a while, but what's what's what are you hearing?

What are you getting the answers?

Yes, it is all of those things.

You know, we were talking earlier about one of the challenges, you know, we the uncertainty, right?

Is is a huge one.

We talked a lot about that.

We're also going into that time of year for many businesses, that is already their hardest time of year, you know, the winter.

And that's especially true for retail, restaurants, hospitality, etc.. So, you know, they they are already saying, you know, am I going to be able to sort of make it, given the natural challenges that we have, you know, the cyclical challenges?

And then again, you sort of layer this on top of the taxes that just went into effect a couple of months ago.

But again, it's the uncertainty that is the biggest challenge.

You know, businesses are resilient.

They are innovative.

They are creative.

But the decisions they have to have a plan.

Yes.

And the decisions that they are potentially faced with making.

To your question, none of them are good.

Changing their business model, laying people off, taking things off the menu, you know, buying in bulk now on the credit card, not knowing what might happen in the future.

Seeing orders get canceled.

I mean, none of that is is helping them be successful in their business.

Our last 60s shameless promotion.

If people want to get involved, small business, how do they go about doing it?

Yes.

They should reach out to wall round table.com.

And they can find us there, can find information about our organization.

And let me just say to small businesses and large, we want to hear your stories.

We want to talk to you.

So please do reach out.

Mike, same question for you.

I don't know if you're running a dashboard that's tracking tariffs or anything like that, but, what can people do if they want to learn more about what's coming down the road for state government?

Well, I mean, look, you can always go to the treasurer's office website.

We actually have a transparency portal.

And I was talking about cost of living.

We're doing all we can to make sure folks are aware of, ways that they can get more money in their pockets.

And that's some of the stuff we have on the Treasurer's office website.

And we're going to keep making sure, at least in the treasurer's office standpoint, we're doing all we can to to decrease the cost and make it easier on the cost of living for folks.

Thanks to both of you.

Great conversation about tariffs.

I know it's it's a little bit of a dry topic, but so important.

I appreciate you coming in you guys.

Thank you for having us.

Donald Trump is using tariffs to try to make the reshoring of American manufacturing more economically viable, and thus reinvigorate a middle class that is slowly disappearing from the American landscape.

The bottom line there is going to be pain.

But while you may not have experienced it, high school educated America did.

When we traded our ability to get more cheap stuff at the store for millions of jobs that we outsourced to foreign workers who were willing or told to work for slave wages in polluted countries with no safety net.

But with that said, while well-executed tariffs could be part of this country's ultimate solution to bring back middle class prosperity and possibly put some fiscal discipline back into the federal budget, they are only part of what must be a logical, consistent, purposeful and decades long, larger national strategy.

When I consider decades of congressional impotence and the increasing level of political division, frankly, I'm not too optimistic.

I hope this program got you thinking and talking.

You can find this program on the web at kbtc.org or stream it through the PBS app, or listen on Spotify and Apple Podcasts.

That's going to do it for this edition of northwest.

Now, until next time, I'm Tom Layson.. Thanks for watching.

Music.