Hochul on tariffs: ‘We’ll have to deal with it’

President Donald Trump is declaring a trade war with New York’s neighbors to the north, and upstaters might get caught in the middle. The changes to trade, directed at both Canada and Mexico, are expected to hurt New York businesses and consumers, with base goods like aluminum and energy expected to rise in price. On Tuesday, Gov. Kathy Hochul said that she recognizes the threat that the new federal policies present to the state. 

“Those are areas where I have to step up very quickly. If I see something on the horizon that can be damaging to New Yorkers, I have to intercede very quickly,” Hochul told reporters on Tuesday. She didn’t elaborate on what intercession would look like. “So if we see that happening, we'll have to deal with it. That has to get out to the public. Everybody has to know the ripple effect that these tariffs will have on every sector of our economy, and it's just starting today.”

New York imports $22.8 billion of goods from Canada annually, according to the Canadian Consul General’s office. This week, the Trump Administration announced 25% tariffs on all Canadian imports other than energy, which is subject to a 10% tariff. These tariffs amount to a tax on foreign goods, which will be paid by the people importing the goods (i.e. American companies and consumers). Imposing a tariff on foreign goods is generally considered a politically dubious maneuver unless spun to the public correctly, as the pain people feel in their wallets or the lack of access to certain products can be unpopular. Utility advocates have reported that ratepayers are already expressing concern about how the trade war will affect them. 

In retaliation for Trump’s tariffs on Canadian goods, Canadian Prime Minister Justin Trudeau announced Tuesday that he would unleash tariffs on an initial $30 billion tranche of American goods, before expanding the trade war to a further $125 billion in three weeks.

On Tuesday, Hochul convened a roundtable of agricultural leaders concerned about how the economic changes might affect their businesses. These include dairy farmers, who are not wholly reliant on Canadian goods but are expected to suffer from Canada’s retaliatory tariffs.  

Former Deputy Assistant U.S. Trade Representative Dylan Hewitt said that during his time in the Biden Administration, they tried to be cognizant of how blowback from tariffs would affect Americans, especially when other countries looked to retaliate. Agriculture, according to Hewitt, is a prime target. 

“They're going to think, ‘How can I smack them right back?’ and at the northern border, disrupting our commerce patterns and disrupting our trade partnerships with Canada means that our family farmers are going to be hit first and hardest,” he said. 

Citizens Budget Commission President Andrew Rein said the tariffs on both sides would have a noticeable effect on economic activity in the state. “The reasonable wisdom is that it certainly can have a dampening effect on economic activity – it may well increase prices, it may well shift where people purchase and business activity overall and in the long term,” Rein told City & State. “Free trade has generated growth. It's hard, at this point, it's hard to determine what specific tariffs will do, but New Yorkers have every reason to be concerned.”