President-elect Donald Trump has repeatedly threatened tariffs on imports from foreign countries to pressure them to curb illegal immigration and the flow of illicit drugs.
When he takes office in January, he’s said he plans to sign executive orders implementing a 25% tax on all imports from Canada and Mexico and an additional 10% tax on Chinese imports.
In his first term, Trump also used the threat of tariffs to negotiate with countries including Mexico. And started an ongoing trade war with China.
West Virginians across the state have said they are struggling with the rising cost of living. Donald Trump won West Virginia with 70% of the vote. Economists say his proposed tariffs would make prices worse.
Experts said stronger tariffs could raise the prices of groceries and technology. The state’s largest trade partners would be hit and could retaliate, furthering the effects on West Virginia’s economy.
Here’s what to know about how Trump’s proposed tariffs could affect West Virginians.
What is a tariff?
A tariff is simply a tax imposed on the import of a foreign-manufactured good that domestic companies pay. However, companies usually offset the costs by raising prices, which consumers then pay.
For example, most bananas at American grocery stores are imported from Central and South American countries because they grow best in tropical climates.
So, when there’s a tariff on bananas, the company bringing them into the country has to pay the extra tax when they arrive. The extra tax gets passed on and shows up on grocery bills.
Tariffs are not a new economic tool and historically they’ve been used to generate revenue when countries were developing. But now, those taxes are primarily used as leverage for trade agreements or to protect domestic manufacturers from foreign competition.
Recently, the U.S. has imposed several tariffs on countries, including China, with the Biden Administration substantially increasing taxes on electric vehicles, steel, aluminum and lithium-ion batteries.
Christina Fattore, a professor of political science at West Virginia University who specializes in international trade relations, said tariffs can start trade wars between countries when retaliation occurs or an “eye for an eye” scenario where consumers lose out in both countries.
“Tariffs are supposed to strengthen domestic industry, but if that domestic industry doesn’t exist, you’re stuck paying it,” she said.
Where does West Virginia import from and export to?
In 2023, West Virginia exported $5.7 billion of goods to other countries. Canada, China, Japan, the Netherlands and Belgium are the largest recipients. The state’s top exports were coal and petroleum gas, vehicle parts, synthetic rubber and chemicals.
“Canada consistently ranks as the state’s top trade partner, accounting for nearly 40% of West Virginia’s exports, particularly in coal, chemicals, and machinery,” said Andy Malinoski, spokesperson for the state Department of Economic Development.
That same year, the state imported $4.8 billion of products from Canada, Japan, Germany, China, and Mexico. Imports included steel and aluminum for vehicles and aircraft, electronics and industrial chemicals.
Tariffs by the U.S. would increase the price of imported goods. If other countries retaliate with their own tariffs on U.S.-made items, industries that export to foreign markets would be impacted.
How will proposed tariffs on imports impact prices in West Virginia? Who pays tariffs?
Trump said in a recent interview that he couldn’t guarantee that his proposed tariffs would not impact consumer prices, and many economists agree that tariffs drive up prices.
“I am really concerned about consumer prices — prices are going to go through the roof,” Fattore said. “Countries will retaliate with tariff taxes on their own.”
Grocery store items like fruits and vegetables would increase in price because the U.S. relies on other countries for produce. In 2022, Mexico alone supplied 51% of fresh fruits and 69% of vegetables that Americans buy.
Gasoline prices could also increase from Canadian tariffs as the U.S. imports crude oil from the country. Some analysts have predicted gas prices could go up by 30 cents or more.
Meanwhile, the price of new and used cars will likely increase as Canada and Mexico remain top suppliers of auto parts and imports to the U.S. American companies like Ford, Tesla and General Motors have factories in Mexico and about 76% of vehicles manufactured in the country are exported to the U.S.
Fattore said when global steel and aluminum tariffs were put in place in 2018, the prices of aluminum cans became more expensive, impacting canned goods, soda and beer. She said technology imports also suffered as Chinese tariffs hurt American businesses during the 2018-2019 trade war.
“If you’re thinking about buying a new car, getting a new phone or buying a computer, I would do that before Christmas or before Trump comes into office,” she said.
How could a trade war affect West Virginia’s jobs?
A new trade war could hit American workers just as hard. Trump’s proposed tariffs could lead to the loss of over 344,000 jobs, according to a report from the Tax Foundation, a nonpartisan think tank. Those projections do not account for any future retaliatory tariffs from other countries.
Fattore said tariffs can usually backfire and harm the job market as other countries retaliate with their own taxes on imported goods.
“I wouldn’t expect more American jobs to come out of tariffs,” she said. “When Trump put tariffs on steel and aluminum, companies like Harley-Davidson actually exported jobs overseas so they could avoid paying import fees.”
Canada is West Virginia’s largest trade partner and tariffs would hurt manufacturers, especially car manufacturers who ship parts back and forth between the border, she said.
In 1994, President Bill Clinton signed the North American Free Trade Agreement, opening the door for freer trade between Canada, Mexico and the U.S. But it disproportionately impacted American manufacturers and pushed thousands of jobs to other countries, hurting places dependent on manufacturing.
In West Virginia, places where steel jobs were significant like Weirton, lost thousands of jobs.
In 2020, the Trump Administration reached a new trade deal with Canada and Mexico to replace NAFTA.
The free trade agreement provided new provisions highlighting digital trade, requiring that 75% of automotive parts be made in North America and allowing the American government to conduct independent reviews of working conditions in Mexican factories.
However, the new proposed tariffs would effectively squash the 2020 deal on free trade between the three countries as it will need to be renegotiated.
The U.S. has 14 free trade agreements with 20 countries, including Canada and Mexico. These agreements eliminate or reduce tariffs and other trade barriers to protect domestic investors.