Washington state could lose $2.2 billion in tax revenue over the next four years if the Trump administration’s proposed tariffs are fully implemented, the state Office of Financial Management reported.
The agency, which handles the state’s budgeting, released a new report Thursday detailing potential impacts from recent tariff actions. The report assumes President Donald Trump’s “Liberation Day” tariffs, which were announced in April, are fully implemented and in effect until 2029. Not all those tariffs are in place.
Among the biggest hits could be to Washington’s general fund, which the state uses to pay for programs and services across the state. The $2 billion loss would come mostly from a reduction in sales tax and business and occupation tax revenue due to consumers spending less and trade-dependent industries selling less.
The report also found that thousands of jobs are at risk and that the cost of certain goods is likely to increase.
Under the “Liberation Day” scenario, Washington could lose up to 31,900 jobs by 2029, according to the report. The hardest-hit areas include agriculture, food processing and aerospace. If just the tariffs that were in effect as of Aug. 7 stay in effect until 2029, job losses could still number between 20,000 and 25,000 jobs.
Meanwhile, the cost of goods would rise, according to the report. Food prices could increase by about 16% over two years. The cost of clothes and shoes could increase by 7% in one year. The cost of used cars could rise by up to 25% over the next two years, and the cost of new cars could increase up to 8%.
“There is no scenario in which these tariffs are good for Washingtonians,” Gov. Bob Ferguson told reporters Thursday.
Washington’s state budget is already strained. Earlier this year, state lawmakers were tasked with filling a multibillion-dollar budget hole over the next four years. They filled it with a mix of new taxes and program cuts.
Recent revenue forecasts show lawmakers will likely face another shortfall once they are back in session in January.
