Astoria, Ore. — President Donald Trump’s decision to pause tariffs on Canada and Mexico for at least 30 days has sparked significant discussion among economic experts, including Carl Riccadonna, chief economist for the state of Oregon. The 25% import tax on Canadian goods, along with a 10% tariff on its energy products, had been set to begin Tuesday, but in a surprise move, Trump delayed the tariffs in hopes of further negotiations.
Riccadonna believes the temporary tariff suspension is part of a broader negotiating tactic rather than a permanent policy shift. “What we’re seeing here is likely a strategy to extract concessions from Canada and Mexico,” Riccadonna explained. “The president is using these heavy-handed tariffs as leverage to secure agreements on issues like fentanyl smuggling and border security.” He suggested that, while the full force of the tariffs might not come into play, the threat of their reactivation could persist as a tool throughout Trump’s administration.
However, the looming question remains: what will happen after the month-long delay? Riccadonna acknowledged that, though it’s unclear whether the tariffs will go into effect, they could still be used as a negotiating tool to secure desired outcomes. “I don’t think we’ll see the full scale of the tariffs threatened just days ago, but they could still be a factor in the ongoing trade negotiations,” Riccadonna said.
Potential Consequences for Oregon
The tariffs, if implemented, could have a notable impact on Oregon’s economy. The state is particularly sensitive to energy exports from Canada, including electricity, natural gas, and oil refined into gasoline. If the tariffs are reinstated, the price of these energy products could rise, putting pressure on local industries.
Beyond energy, Riccadonna pointed out that Oregon’s manufacturing and agricultural sectors could also feel the effects of the tariffs. “The state’s economy has been growing slower than the national average, which makes it more vulnerable to trade disruptions,” he said. The potential tariffs, if implemented, could add further frictions to the economy, particularly as businesses in Oregon would be faced with increased costs and supply chain challenges.
Concerns Over Retaliatory Measures
One of Riccadonna’s primary concerns was the possibility of retaliatory measures from Canada and Mexico. While tariffs can lead to price increases for consumers, he noted that retaliatory tariffs could have a more significant and long-lasting impact on local businesses. “It’s not just about the price hikes at the consumer level. Sometimes the costs of tariffs are absorbed further upstream in the supply chain,” Riccadonna said.
He pointed to the experience from the U.S.-China trade war between 2017 and 2019, which had a significant impact on the U.S. manufacturing sector. Retaliatory tariffs, he warned, could further strain the state’s industries, especially as these tariffs are accompanied by fluctuations in the value of the dollar. As the dollar strengthens in response to tariffs, Oregon businesses—particularly in manufacturing and agriculture—could struggle to compete in the global market.
Riccadonna concluded that, although the temporary pause in tariffs may offer some short-term relief, the underlying economic pressures are far from resolved. As the trade negotiations with Canada and Mexico continue, the state of Oregon will closely monitor the situation and its potential long-term impacts on local industries and consumers.
