WA’s economy faces $2.2B hit and 32,000 job losses from new tariffs, OFM reports

Federal tariffs could potentially result in the loss of tens of thousands of jobs and cost Washington state $2.2 billion over four years, according to a report released Thursday.

Gov. Bob Ferguson announced the results of a new analysis from the state’s Office of Financial Management (OFM), the governor’s budget office, at a Thursday press conference in Seattle.

“There is no scenario in which these tariffs are good for Washingtonians — and don’t be fooled by the (Trump) administration,” he said. “Washington’s working families and businesses, and the state, will bear the cost of these tariffs.”

Ferguson has previously criticized the President Donald Trump-imposed tariffs as being deleterious to the state.

In May, the governor formally endorsed a lawsuit filed by a group of states claiming that the sweeping tariffs are illegal. This week, after a federal appeals court struck down most of the tariffs, President Donald Trump asked the U.S. Supreme Court to overturn the decision.

Yet while Ferguson is sounding the alarm about how tariffs would harm Washington families, Republican lawmakers in the state are questioning the neutrality of OFM’s report. Such critics also note that the governor recently approved the largest tax increase in state history.

Ferguson was joined Thursday by state and local officials and other state residents concerned by the tariffs.

Thomas Reynolds, CEO of Northwest Harvest, a nonprofit that supports hundreds of food banks throughout the state, said tariffs act as a regressive tax, disproportionately hitting low-income residents. Such households spend a greater share of earnings on imported items, which often tend to be more affordable.

With higher prices, Reynolds said, “families are left with fewer choices and less food.” There’s also already growing demand at food banks and rising food insecurity, he added.

Businesses like Boon Boona Coffee are grappling with the impact as well, said owner Efrem Fesaha, noting that 99% of coffee is produced outside the country.

Matt Lutton, a meat cutter and member of the United Food and Commercial Workers International Union, said he’s concerned that higher tariffs will lead consumers to dial back what they order.

“I worry that skimpier suppers for me and my customers means skimpier paychecks for me and my co-workers,” he said.

Washington is among the nation’s most trade-dependent states, logging about $58 billion in exports and $62 billion in imports last year, Ferguson said.

The new report also states that, due to tariff wars, Washington could experience a net loss of $2.2 billion in state revenue over four years.

OFM’s analysis projected the effects that the “Liberation Day” tariffs, which the Trump administration announced in April, would have on Washington if they were wholly implemented and maintained through 2029. With an average effective tariff rate of 27%, OFM estimated there would be:

• Higher food prices: Groceries would see increases in the near term, with 16% higher prices cumulatively over a couple years.

• Higher car prices: New cars prices would rise 6% to 8%, while used car prices would jump about 20% to 25% over two years.

• Higher shoes and clothing prices: The cost of shoes and clothes are forecasted to climb about 7% in one year before easing.

• Jobs at risk: By 2029, Washington would count a net loss of more than 31,900 jobs, especially in aerospace, agriculture and food processing.

Another OFM projection used the effective rate of tariffs as of Aug. 7, which is more than 18% — or “the highest since 1933,” a news release notes. The office said in this case, if extended through 2029, the state would lose some 20,000 to 25,000 jobs.

Ferguson was asked if he thought that state taxes passed in the 2025 legislative session would have a similar economic effect. Citing the state’s multi-billion-dollar budget deficit, the governor said he believes that the right balance was struck between revenue and reductions. WA Republicans decry Ferguson, OFM tariff claims

In a call Thursday afternoon, Washington State Republican Party Chairman Jim Walsh contended that the news conference was meant to divert attention from the state’s upcoming revenue forecast.

The previous quarterly report wasn’t exactly welcome news for state lawmakers. June projections showed that over the coming four years, revenue was expected to be about $720 million less than what lawmakers had accounted for in their latest budget. The next revenue forecast is scheduled for later this month.

“He’s making excuses and trying to blame ‘Trump, Trump, Trump’ for a budget problem that is Ferguson, Ferguson, Ferguson,” said Walsh, who’s also a Republican state representative from Aberdeen.

State Rep. Travis Couture, the House Republican budget lead, picked apart OFM’s tariff report. In a statement texted to McClatchy, he said it “reads like a political document meant to shift blame away from Olympia,” not a neutral analysis.

For example, Couture said it applies a worst-case, Liberation-Day-tariff scenario for four years and assumes that every country will respond with “maximum retaliation.” Some of the tariffs are under negotiation or paused, yet the report presents them as “carved-in-stone facts,” the Allyn Republican said.

Couture said that Washington residents are struggling as a result of the largest state tax hikes in history. Higher prices for cars, food, energy and clothing are already happening because of decisions made in Olympia, he said.

“Families don’t need a 50-page paper about phantom trade wars,” Couture said. ”They need relief from the taxes, fees, and regulations Democrats have piled on them right now.”