Crosswinds Ahead: The Turbulent Tariff Toll on Washingtonians (December 5, 2025)
Summary
Slides titled Crosswinds Ahead: The Turbulent Tariff Toll on Washingtonians, presented by Dr. Abdelmoumine Traore, Senior Economist, to the House Technology, Economic Development, & Veterans Committee on December 5, 2025. The study background states that as of April 2025 the average U.S. tariff on goods went from 2% (in 2024) to 27%. The key findings slide gives 4-year cumulative net losses under its baseline scenario of $8.1 Billion in output sales, 31,930 jobs, $1.3 Billion in labor income and $2.2 Billion in state revenue. Other slides cover inflation, price increases for cars, food and furniture, and risks ahead.
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“Crosswinds Ahead: The Turbulent Tariff Toll on Washingtonians (December 5, 2025).”
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December 5, 2025
Crosswinds Ahead
The Turbulent Tariff Toll on Washingtonians
House Technology, Economic Development, & Veterans Committee
Dr. Abdelmoumine Traore | Senior Economist
Study Background & Scope
• As of April 2025, the average U.S. tariff on goods went from 2% (in 2024) to 27%
• In 2024, Washington State was the 9th highest U.S. exporting state with a total of $57.8B of
exports, and 15th in terms of imports of $62.1B
• Given the importance of international trade in the Washington economy, our tariff
analysis:
o Identifies the top WA imports/exports affected by tariffs
o Estimates the likely impact of tariffs on both services and goods industries in terms of change
in sales, employment, and labor income
o Estimates the potential impact of tariffs on the Washington state revenue and growth
o Estimates the likely impact of tariffs on the prices of goods vital to Washingtonians
2
Study Background & Scope
What the analysis includes What the analysis does not include
• A focus on the short-term, four-year horizon • Precise estimates of impacts from specific
tariffs
• Estimates of the direction and scale of
potential impacts • All behavioral responses (e.g., less travel to
the U.S. from other countries)
• Substitution patterns related to import and
export prices • Comprehensive revenue forecast
• Capturing the interrelated nature of
economic sectors
• Limited revenue forecast – does not take into
account non-tariff factors
3
How Tariffs Work
• Act as a tax on Washington households and businesses: ~90% of tariff costs
are passed on to consumers
• The federal, not state, government collects tariff revenues
• U.S.-imposed tariffs increase price of goods imported
• Foreign retaliatory tariffs reduce demand for Washington exports
• Variably: there are different responses for different types of goods
• Dynamically: impacts change over time as governments, consumers, and
businesses respond
4
Key Findings: 4-Year Cumulative Net Losses
Category Baseline scenario Alternative scenario Industries projected to weather
April 2025 “Liberation Proposed tariffs as of August the greatest impacts:
Day” 7, 2025
• Aircraft & parts manufacturing
Output Sales -$8.1 Billion -$4-5 Billion
• Food, beverage, & tobacco
Employment -31,930 jobs -20,000-25,000 jobs manufacturing
• Crop production
Labor income -$1.3 Billion -$500 Million-
$1.0 Billion
State revenue -$2.2 Billion -$1.5-$2 Billion
5
Key Findings: Impact Depends on Retaliation
Example: Output Sales
• Cumulative impact grows
increasingly negative as
retaliatory tariffs become larger
6
Key Findings: Overall Inflation
Tariffs will increase inflation
This is tariff-induced inflation, on top of what would normally
be expected without the change in trade policy
7
Key Findings: Price Increases
Average Tariff induced Price Change Implications
2025-2029
+7% - New Cars A used car, at $15,000, could
Cars cost an extra $3,450
+21% - Used Cars
Household could expect to
+1.2% - Food and Beverages pay approximately $1,320
Food
+0.4% - Food Services more over two years
Medical
+1.3% - Pharmaceuticals Medication expenses could
Equipment -0.6% - Health Care Consumption rise to $220 per quarter by
mid-2026.
If the household budgeted
Furniture +6.3% - Home furniture $5,000 for furnishings, then an
extra $700 would be needed
8
Risks Ahead
• Washington state’s economy is entering a period of heightened risk due to
the sharp escalation in U.S. tariffs in 2025
• The sharp rise in input prices is undermining productivity and
competitiveness in core industries like aerospace, electronics, and
agriculture
• The revenue implications of these economic shifts are significant
• Rising costs for public infrastructure represent another concern
• Tariff-related inflation disproportionately affects low-income families and
small businesses
9
Appendix
Key Findings
Top 20 Imports
Affected by
Tariffs
11
Key Findings
Top 20 Exports
Affected by
Tariffs
12
Key Findings
Impacts on
Output Sales
Grand total:
4-Year Cumulative Net loss of $8.1 Billion
Figure is truncated to fit on slide. See full report for entire graph
13
Key Findings
Impacts on
Employment
Grand total:
4 Year Cumulative Net loss of 31,930 jobs
Figure is truncated to fit on slide. See full report for entire graph
14
Key Findings
Impacts on
Labor Income
Grand total:
4-Year Cumulative Net loss of $1.3 Billion
Figure is truncated to fit on slide. See full report for entire graph
15
Key Findings
Impacts on
State Revenue
Grand total:
4-Year Cumulative Net loss of $2.2 Billion
Figure is truncated to fit on slide. See full report for entire graph
16
Key Findings: State GDP
Forecasted to
decline by
1.2-1.8% quarterly
17
Key Findings: Food
18
Key Findings: Cars and Transit
19
Key Findings: Transportation Equipment
20
Key Findings: Utilities
21
Key Findings: Housing and Furniture
22
Key Findings: Health Care
23
Key Findings: Clothing and Footwear
24
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