Arizona’s economy depends heavily on international trade, which supports 830,000 jobs statewide, meaning that one in five jobs are directly related to a trade-dependent industry that stand to suffer from tariffs.

 

Universal tariffs levied on foreign imports carry significant economic consequences. As the cost of acquiring imported material rises, domestic producers will need to raise consumer prices to ensure these transactions remain cost-effective.

 

The effects of increased import taxation can bleed into unrelated facets of everyday life, with the potential for inflated costs of produce, gasoline, and much more.

 

Trade has been on a strong upward trajectory, with Arizona companies exporting $28 billion in goods and $17 billion in services in 2023, marking a 10-year high. Implementing broad-based tariffs could threaten this growth by making it more expensive for businesses to operate, ultimately slowing the state’s economic momentum.

 

Should the United States pursue an increased tax on imports from trade allies, both businesses and consumers alike will pay the price; if costs rise, consumer spending will drop, making it increasingly difficult for businesses to maintain their profit margins.

 

The enactment of these tariffs also expands the possibility for retaliation, as nations targeted by import taxes are more likely to respond with sanctions of their own on U.S. exports, further perpetuating an already unpredictable cycle. This is particularly concerning given that Arizona’s total goods and services exports have increased by $12 billion (38%) over the past decade.

 

The state’s ability to remain competitive in the global marketplace depends on stable trade relationships, and the imposition of tariffs could disrupt those, harming both small and large businesses alike. If the U.S. continues to impose sweeping tariffs, businesses – importers, exporters, and countless others downstream – will get caught in the crossfire.