What Do the Tariff Threats Against Canada, Mexico, and China Mean for Washington?

1The Proposal

On February 1, President Donald Trump issued three executive orders imposing steep tariffs on the United States' top trading partners: Canada, Mexico, and China. Citing national security concerns over immigration and fentanyl trafficking, the administration invoked the International Emergency Economic Powers Act (IEEPA) to levy across-the-board 25 percent tariffs on imports from Mexico, 25 percent tariffs on Canada except for energy products (taxed at 10 percent), and a 10 percent across-the-board tariff on China and Hong Kong.

The tariffs on imports from China and Hong Kong took effect on February 4. Initially scheduled to take effect at the same time, tariffs on Canada and Mexico were postponed for one month.

There will be significant national economic implications should all these tariffs take effect. Based on 2024 data, the new rates would have resulted in an estimated $246 billion more tariffs, or over $928 million in extra taxes on U.S. importers per day.¹

2Impacts for Washington State

For Washington, which shares a 427-mile border with Canada, the economic impact would be severe. Canada, Mexico, and China account for nearly half of the state's imports, totaling $30 billion in 2024. Due to nearly universal duty-free treatment under the U.S.-Mexico-Canada Agreement (USMCA), Washington businesses paid $16 million in tariffs on $19 billion in imports from Mexico and Canada — an effective tariff rate of just 0.08%. By contrast, Washington companies paid $1.3 billion in tariffs on imports from China — more than any other country — because tariffs averaged 11.9%.

With such robust trade relationships at stake, the cost of the newly proposed tariffs could have major consequences for Washington businesses and consumers. Altogether, the new measures would cost Washington an estimated $4.2 billion. For context, the state paid only $2 billion in total tariffs on all imports from all countries in 2024, meaning the new proposal could more than triple the total tariff burden.

3Tariffs on Canada

Tariffs on Canada would have the largest impact by far. In 2024, Washington imported $18 billion of goods from Canada — about 30% of Washington's total imports and over $6 billion more than any other trading partner. Despite this massive amount of trade, Washington paid only $13 million in tariffs on Canadian imports due to the USMCA. The new 10% tariff on energy imports and 25% tariff on everything else would have added an estimated $2.7 billion in new taxes based on 2024 data, or nearly $7.4 million per day.

Crude oil, petroleum gases, lumber, live cattle, and wooden boards could face the most new tariffs. Despite the lower rate for energy, a 10% tariff on crude oil and natural gases is a major cost increase — taxes on these two products alone would add over $900 million in additional costs for Washington importers.

4Tariffs on China

China is Washington's second-largest source of imports. The $11 billion in goods purchases from China accounted for 18 percent of Washington's total imports in 2024. The 10% tariff, which took effect on February 4 and is imposed on top of current most-favored nation and Section 301 tariffs, could cost Washington businesses over $1.0 billion in tariffs annually, roughly $3 million per day. Among all states, Washington ranks 9th in the potential costs of newly imposed China tariffs.

Imports from Hong Kong — which now also face an across-the-board 10% tariff — were just 0.04% of total imports into Washington state in 2024, at $24 million. The additional tariff on Hong Kong will cost the state $1.2 million annually.

Unlike Canada, many of Washington's imports from China are finished consumer goods where retail prices paid by Washington households could soon rise. Top imports include toys, video game consoles, seats and parts, heaters, exercise equipment, and footwear — everyday goods now subject to hundreds of millions of dollars in annual new tariffs.

5Tariffs on Mexico

Mexico is Washington's seventh-largest source of imports. Total imports were approximately $1.5 billion in 2024. Like Canada, these products face very few tariffs due to USMCA — the average tariff rate on Washington's imports from Mexico was just 0.20%. That would change rapidly if the threatened tariffs take effect, with potential new tariffs of about $969 million annually.

Washington's top imports from Mexico include semitrucks and trailers, tractors, refrigerators, control panels, and miscellaneous electrical machinery. These products account for nearly half of all Mexican imports into the state and could face a collective $155 million in new tariff costs.

While import trade volumes from Mexico are lower than Canada or China, Washington ranks among the top 10 buyers of more than 100 different Mexican products, underscoring the deep trade ties between the two economies.