Washington’s economy runs on trade, with two out of every five jobs in the state connected to global markets. Tariffs act like taxes that raise the cost of equipment and materials, making it harder for businesses to hire and keep employees. People then cut back on spending, and the slowdown spreads to sectors not directly targeted by tariffs. When foreign governments retaliate with their own tariffs, demand for Washington goods falls again. The result is fewer jobs, weaker sales, and tighter budgets for essential services. While the federal government collects additional tariff revenue, state and local governments could lose billions, leaving Washington to bear the cost of a slowed economy. These projections come from OFM’s economic model, which assumes the “Liberation Day” tariffs stay in place for the next four years.

By the numbers (under the “Liberation Day” scenario)

• A net loss of about 31,900 jobs through 2029, increasing demands on public services.
• A net loss of about $8.1 billion in sales for Washington businesses by 2029. These are everyday transactions across industries, so it means people and companies are spending less — often the first sign of job cuts or delayed investments.
• State Gross Domestic Product (GDP) growth projected to be 1.2% to 1.8% lower each quarter through 2029. Weaker growth means a smaller economy, slower wage gains, and less business activity.
• The state general fund will lose about $2.2 billion by 2029 if the model’s assumptions hold true. This is Washington’s main budget for schools, health care, public safety, and other core services. Fewer dollars mean more difficult choices for essential programs.

What to watch for next

• Farm towns losing export markets for apples, wheat, and potatoes.
• Changes in aerospace production signaling impacts on the state’s largest manufacturing sector and its jobs pipeline.
• Decisions by major trading partners, including exemptions or new tariffs, directly shaping where Washington products can be sold.
• Hotel bookings, restaurant traffic, and event schedules reduced as tariffs impact local economies.

Learn more about how tariffs threaten to raise prices, disrupt critical state industries, and eliminate jobs in Crosswinds Ahead: The Turbulent Tariff Toll on Washingtonians from the Washinton State Office of Financial Management.