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Washington woke up Saturday morning to a bad case of economic déjà vu.
A new round of U.S. tariffs on Canadian imports kicked in early Saturday after talks between the two countries broke down, with Canadian Prime Minister Mark Carney suggesting Canada was in an economic war" with its neighbor.
Barring a diplomatic breakthrough this weekend, American importers can expect to pay tariffs of 50% on some $20 billion worth of Canadian booze, dairy goods and other products, on top of some previous tariffs.
And Canada, which happens to be one of Washington’s most important trading partners, has vowed to retaliate “dollar for dollar” on American goods, starting Sept. 8.
Tariffs — taxes on importers that are often passed along to consumers — are a political hot button. The new tariffs brought a quick response from Democratic lawmakers, who see President Donald Trump's trade policy as a political target for the November midterms.
"Costs are already too high thanks to Trump’s war and OTHER tariffs — and Trump just made them HIGHER," U.S. Sen. Patty Murray, a Washington Democrat, posted Saturday on X.
Among trade experts in Washington, the reaction was more one of exhaustion.
Washington is among the most heavily trade-dependent states. It's also still feeling the aftershocks of last year's dispute with Canada, when high-level negotiating tactics quickly escalated into a culture war that had citizens on both sides of the border boycotting each other.
“I was hoping there would be a reprieve and that we weren't to this point,” said Lori Otto Punke, president of the Washington Council on International Trade, in a phone call Saturday morning. “And here we are.”
'Some impact on us'
Where “here” is, however, is hard to say.
Some experts said the economic effects on Washington may be relatively modest, at least in the short term.
The new tariffs will hit around 5% of Canadian exports to the U.S., according to a recent analysis by the Chicago Federal Reserve.
Although it's unclear exactly how that would play out in Washington, it would likely translate into a fairly small share of the state's Canadian imports, which were $8.5 billion in the first half of 2026, according to state Department of Commerce data.
For example, the new U.S. tariffs don't affect one of Washington’s biggest Canadian imports: Oil and other energy products made up more than half of all imports so far this year.
On Saturday, Canada announced it would impose retaliatory tariffs on U.S. steel, dairy, appliances, electronics, pulp and paper products and farm machinery, among other products, starting Sept. 8.
In the first half of 2026, the state exported around $4 billion in goods to Canada, including $211 million in pulp and paper products, state data shows, but it's not clear how much of that would be affected by any Canadian retaliatory measures.
“That would mean some impact on us … but possibly not too much,” said Apurva Jain, a supply chain expert at the University of Washington's Foster School of Business.
Some imported Canadian commodities, such as steel for construction, represent a fairly small share of overall demand in the U.S.
Mortenson, a national construction firm with many Seattle-area projects, estimates only around 5% of its building materials come from Canada, said Nathan Jenkins, Seattle-area director of business development.
Another factor, said UW's Jain, is that U.S. supply chains became much more resilient after the trade disputes in the first Trump administration, which led many U.S. companies to develop alternative suppliers and markets.
As a result, when Trump launched aggressive tariffs soon after taking office again in 2025, many economists predicted massive price spikes and supply chain disruptions, but were “super surprised as to how much tariffs supply chains could take … without the sky falling on our heads,” Jain said.
'Businesses need predictability'
But there are differences this time around.
Before Trump's tariffs in 2025, many U.S. companies stocked up on imports, which helped blunt the costs of the tariffs, said Brian Kelly, a Seattle University associate economics professor who studies trade policy.
The latest tariffs emerged so quickly — Trump proposed them in late July — it's possible "importers didn't have time to react," Kelly said.
And there are limits to importers' ability to find other sources.
The U.S. relies heavily on Canadian softwood lumber, which has been hit repeatedly by U.S. tariffs, including last year. Renewed trade tensions have set back hopes by U.S. homebuilders and other big lumber users that the 2025 tariffs might be eased.
The longer the dispute drags out, the more disruptive it becomes, especially if businesses begin delaying projects or hiring over concerns about the cost or availability of materials.
"Businesses need predictability to make investment decisions," Kelly said.
That sort of unpredictability bleeds over into other sectors that aren't usually considered in trade disputes.
Canadians took it personally last year when Trump levied heavy tariffs on Canadian products and made vague threats of making the country the “51st state.”
Southern crossings at the Canada-Washington border plunged, and tourism took a hit, said Laurie Trautman, director of the Border Policy Research Institute at Western Washington University.
By April, things had started to improve, and while crossings are still down substantially from 2024, the rate of decline is slowing.
Now, however, Trautman worries that modest recovery could suffer with renewed trade tensions.
"Cross-border travel seemed to be resuming, and then we see the news today, and I expect that will have an impact on Canadian visitation," Trautman said.
Businesses that depend on Canadians are adapting, she said, and even before this latest round of trade tensions, fewer Canadians had become the norm.
"I think we are facing a sustained period of relatively low Canadian travel to the U.S.," she said. "And it doesn't feel like there is a whole lot we can do about it.
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