Justin Tang/The Canadian Press via AP
A protester holds the flags of Canada and the United States on Parliament Hill in Ottawa, February 1, 2025.
With a trade war looming between the United States, Canada, and Mexico, the nation’s governors are still in the dark about the battle plan after White House meetings with President Trump, his cabinet secretaries, and advisers. What they do know is that a prolonged disruption of North American trade will drive a stake into their states’ economies. That was one of the messages from Gov. Jared Polis (D-CO) and Gov. Kevin Stitt (R-OK) at the National Governors Association’s recent winter meeting in Washington.
Polis, the NGA chairman, underscored his support for free trade with Canada and Mexico during a news conference with American and Canadian reporters. He said that the topic “almost certainly came up in many conversations.” The Colorado governor met with Treasury Secretary Scott Bessent, Office of Management and Budget Director Russell Vought, and Interior Secretary Doug Burgum, and specifically raised the issue of tariffs with Stephen Miller, the White House deputy chief of staff for policy.
Despite those meetings, he did not come away with clarity on where North American trade discussions are headed. “I don’t think any of us really know what’s in the president’s mind here,” Polis said in response to a question from the Prospect. “If this results in a place with lower tariffs and lower trade barriers, I’ll be the first to compliment that. If it leads to additional tariffs, I will be the first to criticize that, because that will hurt the American people: It will hurt manufacturing, it will hurt exports and hurt consumers.”
Trump insists that he intends to levy tariffs on the two countries beginning on March 4th. The 25 percent levies on Canadian steel and aluminum are set for March 12th. Economists estimate that lower-income households could suffer more than $1,000 in losses as a result of those levies. For the moment, there’s little indication that Canada and Mexico can stave off this catastrophe; Trump has repeatedly reiterated his determination to move ahead with these tariffs.
Canada is Colorado’s number one import partner: 33 percent of the state’s imports travel across the northern border. Crude petroleum imports make up more than half of the state’s nearly $6 billion in Canadian goods imported annually. On the export side of the ledger, meat; optical, medical, and precision instruments; and engines and turbines are the top three commodities that Colorado ships to the north, comprising $700 million of the $1.9 billion in its exports to Canada.
“What’s shocking to me is how misinformed a lot of the elected officials are down here.”
Overwhelmingly Republican Oklahoma could potentially face even more brutal consequences in a trade war. Like Colorado, energy imports of Canadian crude petroleum are significant, totaling $7 billion, which constitutes 80 percent of the state’s imports from Canada.
Despite the bipartisan virtue-signaling that is a perennial feature of the annual NGA meeting—Polis fell back on the frayed “no Democratic or Republican way to fix potholes” cliché, while Stitt opined that all governors want the best education, health care, infrastructure, and economic outcomes—there were still bright fault lines on the subject of tariffs between the governors of blue and red states.
Stitt, the NGA’s vice chairman, hewed closely to the contention that the president’s stance on tariffs is a “tool” designed to speed manufacturing jobs back to the U.S., and praised Trump’s effort to pursue trade fairness in dealings with Europe and China. “If there’s a lever that we’re using right now for negotiating purposes,” Stitt said, “we stand behind the president.” He did not, however, elaborate on how tariffs would accelerate that transition. Washington University in St. Louis researchers, along numerous others, have found that Trump’s 2018 tariff regime did not lead to a significant uptick in reshoring.
Gov. Phil Scott (R-VT) attempted to decode Trump’s pronouncements on trade for the Prospect. “We’ve taken the approach that much of what we’re hearing is rhetoric, some is real; we are trying to determine which is which,” Scott said after a session of the public-health and disaster response task force that he co-chairs. Canada is not only Vermont’s next-door neighbor, but also its largest trading partner, and the governor has launched an interagency task force to study possible impacts on the state.
It’s clear from a snapshot of the Vermont economy that a trade war would have a devastating impact on the state’s economy, energy consumption in particular. Petroleum products heat 56 percent of Vermont homes, the third-highest level in the country. About half of the state’s energy imports come from Canada, including coke, fuel oil, diesel, and natural gas, totaling a little more than $1 billion—half of the state’s $2.6 billion import portfolio. The agricultural sector relies heavily on imports of feed and fertilizer. On the export side, Vermont’s iconic maple syrup would take a major hit; 86 percent of the state’s exports are consumed farther north.
Canadian premiers Doug Ford of Ontario and Tim Houston of Nova Scotia attended the NGA meeting on a public relations mission to convince and educate state leaders about how high the stakes are. Ford, a onetime Trump acolyte, has morphed into a passionate “Captain Canada,” and one of the leading critics of the new U.S. turn to tariffs.
“What’s shocking to me is how misinformed a lot of the elected officials are down here,” Ford told the CBC. He found himself explaining Canada’s importance to the energy and manufacturing sectors in many U.S. states and spelling out “how critical” Canadian resources like aluminum, nickel, potash, and uranium are to their economies. “So, when we tell them all this,” Ford said, “they’re like, ‘Wow, we didn’t realize this.’” Ford has called a snap provincial election for February 27. The Progressive Conservative is favored to power to a third term on the strength of Ontarians’ apoplectic reactions to the trade debacle.
One of the biggest fears for the governors is the almost certain prospect of tit-for-tat retaliatory tariffs. In 2018, during the first Trump administration, Canada levied a 10 percent tariff on whiskey that decimated smaller producers in states like Kentucky. Canada is the second-largest market for American distillers (the European Union is number one), and it’s Kentucky’s primary export market for signature spirits like bourbon. Canadian liquor retailers have already taken American alcohol products off the shelves. British Columbia no longer sells American brands produced in Republican states; Ontario and Nova Scotia have instituted bans as well.
For his part, Gov. Andy Beshear (D-KY) remains optimistic there’s a deal within reach. “We hope to see a rethinking of how bourbon is being treated in retaliatory responses,” he told the CBC, “because nobody should have to go without Kentucky bourbon.” Unfortunately for Kentucky, many Canadian consumers have already changed their drinking habits.
