Updated at 5:35 p.m.
President Donald Trump signed executive orders Saturday imposing steep tariffs on imports from Canada, Mexico and China, a move that state officials and business leaders said could disrupt supply chains and raise consumer prices in Vermont for some goods and energy products.
Citing national security concerns, Trump placed 25% tariffs on goods from Canada and Mexico, and 10% tariffs on goods from China. He also declared a 10% tax on energy imports from Canada, including electricity and natural gas.
The taxes levied against Canadian goods were expected to go into effect on Tuesday, but posts made by both Trump and Canadian Prime Minister Justin Trudeau on social media late Monday afternoon indicated that the policy would be postponed for at least 30 days. Mexican leaders had reached a similar agreement with the Trump administration earlier in the day.
As of Monday evening, the tariffs against Chinese goods were still expected to take effect Tuesday.
The tariffs, especially those levied on Canadian goods, could have far-reaching impacts on Vermont, a state whose economy relies heavily on its neighbor to the north. Canada is Vermont’s largest international trading partner, and the state imports about $2.6 billion in goods each year from Canada while exporting $680 million worth of goods in return, according to statistics from the Canadian consulate general.
Sen. Peter Welch, D-Vt., who hosted a roundtable with Vermont business leaders last week, said Monday morning that Trump was “creating enormous administrative havoc” and “great uncertainty” for Vermont companies.
“These tariffs are a really bad idea for our businesses and our economy and our consumers,” Welch said.
Amy Spear, president of the Vermont Chamber of Commerce, said that regardless of whether the policy was adopted, the confusion clouding the decision-making process was in itself a stumbling block for the state’s economy.
“Policy predictability matters,” Spear said. “Businesses thrive on stability, and volatile trade policy creates uncertainty, making it difficult for businesses to plan for the future.”
For years, Burlington-based ski brand J Skis has produced its skis at Utopie MFG, a manufacturer based in Quebec. But with the potential of a steep price hike on the imported product, Jason Levinthal, the founder of the company, said he’s concerned about how to plan for the new trade policy.
“Going to another factory — that couldn’t happen for another two years,” Levinthal said. “And by then, I have no guarantee that these tariffs are still going to exist. I don’t even know if these tariffs are really going to exist now.”
But whether or not the tariffs go into effect, Levinthal said, he still has to worry about navigating a new regulatory environment.
“I need to make real time real life business decisions based on what I know now,” he said. “If I don’t, I’m going to be screwed later.”
Should it be enacted, the tax on Canadian energy also threatens to escalate costs in a state that depends on fuel and electricity from there, importing about $775 million of electricity and $420 million of fossil fuels from Canada per year, according to stats from the Canadian consulate general.
“We’re very concerned,” said Rebecca Towne, CEO of the Vermont Electric Cooperative.
According to Towne, the VEC gets over 40% of its electricity from Hydro-Québec, a Canadian supplier of hydroelectric power. Towne said it was still unclear how exactly the tariffs would apply to imported electricity but a preliminary estimate indicated the cooperative could face up to $2 million in extra costs for 2025 — a cost that would likely get passed down to consumers.
“Our power supply costs are ultimately paid for by our consumers,” Towne said. “We’re a non-profit. That’s how it trickles down.”
Meanwhile, Vermont Gas Systems, the state’s sole natural gas distribution company, gets almost 100% of its natural gas supply from Canada, according to director of public affairs Dylan Giambatista.
Giambatista said there’s still “a ton of variability” and uncertainty surrounding the implementation of the tariffs, but Vermont Gas, a subsidiary of Canadian energy giant Energir, is expecting to see dramatic cost increases.
“That 10% tariff on Canadian energy is certainly going to have a direct rate impact on our customers,” he said, noting that any rate increases would likely not take effect until this spring.
Imports from Canada and China also play a large role in the Vermont construction industry, which depends in part on imported timber, steel, aluminum and other commodities.
Sarah Mearhoff, communications director for the trade association representing Vermont’s construction industry, said tariffs on these items could threaten to increase homebuilding costs at a time when Vermont is already seeing sky-high housing prices.
“You can imagine that a lot of framing for homebuilding is done with timber, and a lot of that in Vermont’s industry specifically comes from Canada,” Mearhoff said.
“Because housing prices are already so inflated, because the cost of constructing a single unit of housing is already at a record high… our members can’t just eat a 25% tariff,” she said. “They are not making the profit margins necessary in order to just absorb that cost. That cost is going to be passed on.”
Sen. Bernie Sanders, I-Vt. said in a statement that the tariffs were “most likely illegal and definitely harmful.”
“Given Vermont’s long-established economic ties with our Canadian neighbor, the impact on our state will be even greater,” Sanders said. “We need a rational and well-thought-out trade policy, not arbitrary actions from the White House.”
Carly Berlin contributed reporting for this story.
Disclosure: Sarah Mearhoff reported for VTDigger from October 2021 until December 2024.
