What Trump’s tariffs mean for three states

Governors from both parties warned against this.

I’m going to share some of this interview from December with three Western governors. Two were Republicans: Spencer Cox of Utah and Mark Gordon of Wyoming. One was a Democrat, Michelle Lujan-Grisham of New Mexico. It was a fun conversation with three chief executives who plainly like each other. And they had distinct opinions about tariffs in general—especially tariffs on Canada and Mexico.

This conversation begins to give an idea of why many Americans were dreading a trade war in general, and a trade war with our allies and neighbors in particular.

President Trump campaigned on the idea that there would be no higher prices or other costs for Americans from high tariffs, only benefits. Over the weekend he shifted somewhat, acknowledging that “maybe” there will be “some pain” from his chosen course.

Below is the key part of the conversation from December. I appreciated it because all three brought up complexities and real-world American business issues rather than talking points.

What would tariffs mean for your state? Higher tariffs on every product.

LUJAN GRISHAM: It means higher prices. Most of my food for feeding New Mexicans, even though we're also a high ag production state, comes from Mexico. We already, today, are paying 10% more on average at grocery stores for most Americans, and we're one of the poorest states. We're trying to open up more ports of entry, which are getting positive reviews currently by the federal government. And I hope that doesn't stall, because we need these goods and services coming across.

INSKEEP: I want people to know you have an industrial area down near the border.

LUJAN GRISHAM: Santa Teresa, yeah.

INSKEEP: Not far from El Paso, Texas. A lot of industries in that area - as they make products, it goes back and forth across the border again and again and again.

LUJAN GRISHAM: It does. Well, here's an example. Look, New Mexico's home to the first reshoring of manufacturing solar panels in the country. But a lot of the subcomponent parts are made in Mexico. So now, if we're going to create a tariff situation, we're holding them at the border in ways that are complicated and don't promote getting these industries for manufacturing off the ground. If their costs go up, then we're weighing in and hoping to get the right kind of flexibility and attention that we're going to need here.

INSKEEP: Now, you hear there why we're spending a little extra time with these three Western governors. National issues that seem big and abstract, black and white - like, tariffs, good or bad - get more complicated.

COX: Yeah. Look, Mexico is a really important partner for us in the state of Utah - in fact, for most of our Western states. I'm assuming it's a top-three trading partner probably for all of us.

LUJAN GRISHAM: No. 1 for us, yeah.

COX: No. 1 for you. Definitely top three for us. And I just want to say - I hope we can look at this a little differently. With what's happening in China right now, Mexico now becomes one of our most important trading partners. Even more than just the raw numbers, we have so many organizations in the state of Utah that are leaving China and looking to reshore and nearshore. Some of them are coming back to Utah, but not all of them can. And they're coming to Mexico, which is good for both of us. It helps with the border issues, as well.

INSKEEP: Oh, helps with the border because a better Mexican economy...

COX: Exactly, yes.

INSKEEP: ...Absorbs workers. Fewer people coming in.

COX: Absolutely. That's what I mean. The people are much less likely to come here for jobs when they have great jobs there.

INSKEEP: Governor Gordon, you were nodding.

GORDON: Our relationship with Canada is also incredibly important. We have manufacturers that require pieces of equipment and other things that come from Canada only. I can remember in the first Trump administration, early on, having a conversation with Larry Kudlow where I was saying, you know, we have tariffs across a lot of things. But our domestic nuclear power industry is dependent on Russian and Kazakhstan uranium. We need to have that fuel manufactured here domestically. So my hope is that as we look at these policies, some of them can be very valuable in building up our domestic capacity. Doing that in a balanced way is what's going to be key.

INSKEEP: I feel that I'm hearing you saying an across-the-board tariff on everything is bad. Carefully targeted, thoughtful tariffs could be useful in specific places. Is that what you're saying?

GORDON: Yeah, I think that's probably true.

That’s how three American governors viewed the prospect of a trade war with Canada and Mexico last December.