KEY POINTS
  • International trade is a powerful component of Utah's nation-leading economy.
  • Tariffs could impact both sides of the state's import-export sector and consumers.
  • World Trade Center Utah leader urging prudence amid rising tensions.

As the tumult surrounding a package of tariffs ordered by President Donald Trump and targeting goods from Canada, China and Mexico continued Monday, international trade group World Trade Center Utah was working to understand the potential impacts on the state’s roughly $37 billion import/export economy and how the actions might alter upcoming trade missions.

Utah made plans months ago for trade missions to Mexico in March and Canada in May. Gov. Spencer Cox is scheduled to lead the Canada visit, one that is expected to include talks about critical minerals, energy resources, life sciences industries and other trade-critical topics.

Jonathan Freedman, World Trade Center Utah president and CEO, said the current trade climate is fraught with sensitive issues and his organization is advising members of the Utah business community to not overreact as tensions rise. He noted the upcoming trips will be crucial, now more than ever, to supporting Utah companies and a state economy that’s largely built on a network of vibrant, small business operations.

“Yes, this is an economic headwind,” Freedman told the Deseret News in an interview Monday. “But Utah shows up. Honestly, I see this as an opportunity for Utah ... to lead the way in sub-national diplomacy, international partnerships and economic development.”

Tariff turmoil

On Saturday, Trump announced plans to impose 25% tariffs on goods from Mexico and Canada and 10% tariffs on goods imported from China. The plan also included a 10% tariff on energy resources from Canada. The trade actions were due to take effect at midnight on Tuesday.

But by Monday afternoon, both Mexico and Canada earned 30-day delays on tariff implementation after pledging to take actions aimed at reducing the flow of fentanyl across their borders into the United States. Mexican President Claudia Sheinbaum pledged to deploy 10,000 National Guard troops to bolster border security and Canadian Prime Minister Justin Trudeau committed to a $1.3 billion border plan and the appointment of a “Fentanyl Czar.”

Leaders from both Canada and Mexico had signaled retaliatory U.S. tariff responses before the agreements that led to each country’s 30-day reprieve. The China tariff was still scheduled to take effect Tuesday night, but White House press secretary Karoline Leavitt told reporters Monday that Trump would speak with Chinese President Xi Jinping in the next couple of days and that the White House would provide a report on the discussion, per The Associated Press.

Work goes on as Rio Tinto Kennecott employees give a tour of the new visitors area at the Bingham Canyon Mine on Tuesday, Sept. 18, 2018.

Should the new tariffs go into effect, the punitive fees could have widespread impacts on Utah businesses and their employees.

Utah’s international trade footprint

According to a report published last year by the University of Utah’s Kem C. Gardner Policy Institute, Utah companies produced $17.4 billion worth of international goods exports in 2023 that generated over $4 billion in earnings and directly supported nearly 72,000 jobs. That volume contributed over $8 billion to the state’s gross domestic product and $16.7 billion to the state’s gross output. The state exported goods to 200 countries and imported goods from 151 countries.

Related
Trump put tariffs on goods from China, Canada and Mexico. Here’s how they responded

While the United Kingdom is, by far, Utah’s biggest export partner, the next three biggest are those targeted by the Trump tariffs — Canada, China and Mexico. The UK received $7.2 billion worth of Utah goods in 2023 or 41.2% of total exports. Approximately $6.8 billion of the exports to the UK stem from unwrought gold, much of sourced from Rio Tinto Kennecott operations in the state. Canada received $1.7 billion in Utah goods in 2023, Mexico $1.3 billion and China $1.2 billion, according to the Gardner report.

Mexico, Canada and China are also Utah’s biggest import origin countries, sending Utah $4.8 billion, $3.1 billion and $2.7 billion worth of goods, respectively, in 2023.

While Utah’s export value grew by nearly 5% from 2022 to 2023, import volumes have been increasing at a faster pace the last decade and reached $18.6 billion in 2023, resulting in a state-level trade deficit of $1.2 billion.

Freedman noted international trade was a critical component of Utah’s nation-leading economy.

“In Utah, 25% of the jobs rely in some way on international trade,” Freedman said. “That’s over 430,000 jobs, a significant amount that is critical for our economy.”

In addition to offering expertise and resources for Utah businesses to grow their international markets, WTC Utah coordinates various trade missions around the world aimed at building government and business relationships and directly connecting Utah companies with new opportunities.

How to navigate a trade war

Freedman said his group has been fielding a flood of communications from Utah companies that are trying to understand the potential impacts of the new tariffs and seeking solutions to staying competitive if trade sanctions go into effect.

For Utah companies that rely on imported goods and components for their products, the Trump tariffs could significantly raise the cost of doing business. For exports, retaliatory tariffs, if implemented, could push the prices of those Utah-sourced goods well above those of their competitors.

304
Comments

Freedman noted most of the Utah businesses engaged in export-dependent operations, some 85%, are small-to-medium size companies that help contribute to the state’s diverse economic portfolio, but lack the scale to make big moves to navigate tariff impacts.

“Small business face much bigger challenges and can’t just, for example, relocate their manufacturing sites or deploy a large legal team to identify possible loopholes,” Freedman said. “This could have an inflationary effect on Utah companies that are paying the tariffs as well as the end customer who is buying the products.”

Freedman added that products subject to potential tariffs help “sustain daily life” in Utah and include Canadian lumber, Mexican produce, oil and other commodities.

“We have a housing issue in Utah,” Freedman said. “We’re building houses as fast as we can and we can’t afford to have raw materials jump so much, so quickly.”

Join the Conversation
Looking for comments?
Find comments in their new home! Click the buttons at the top or within the article to view them — or use the button below for quick access.