Phil Scott

Burlington, VT – August 8, 2025 – New tariffs imposed by former President Donald Trump on goods imported from Canada are already raising concerns among Vermont businesses and officials, with potential impacts ranging from increased construction costs to higher prices for vehicles and clothing. The tariffs, announced last week, target steel, aluminum, and automobiles, reviving trade tensions with a key economic partner.

While some levies include exemptions, the overall effect is expected to be inflationary for Vermont consumers and businesses. Vermont Agency of Commerce and Community Growth Secretary Joan Goldstein confirmed the agency is actively monitoring the situation and assessing the potential economic fallout for the state.

According to Patrick Pieciak, a Vermont economist, the metal tariffs are already impacting the construction sector. Developers of housing projects in Chittenden County and commercial properties in Rutland County have expressed worries about escalating material expenses. “Projects currently underway largely benefited from materials sourced before the tariffs took effect,” Pieciak explained. “Though, projects in the planning stages – including the proposed $25 million expansion of the Killington Resort and the redevelopment of the Burlington waterfront – face increased costs.”

The automotive industry is bracing for price increases, though the impact hasn’t yet materialized at Vermont dealerships. Matt Cota, president of the Vermont Auto Dealers Association, noted the typical lag time between factory production and retail sales. “It takes time for new tariffs to filter through the supply chain,” Cota said. “But unless thereS a reversal, Vermonters should anticipate higher vehicle prices in the coming months, possibly adding $500-$2000 to the cost of a new vehicle.”

Beyond metals and automobiles, the Yale Budget Lab estimates significant price hikes in apparel. Their analysis, released this week, projects a 39% increase in shoe prices and a 37% increase in clothing costs for consumers. This could disproportionately affect lower-income Vermonters, who spend a larger percentage of their income on these goods. The lab’s model uses data from the U.S. International Trade Commission and Bureau of Labor Statistics.

Governor Phil Scott, speaking at a press conference in Montpelier, voiced concerns about the tariffs’ impact on the U.S.-Canada relationship and Vermont’s tourism industry. “Canada is our largest trading partner, and a strong relationship is vital for Vermont’s economy,” Scott stated. “These tariffs risk damaging that relationship and could deter Canadian tourists, who contribute over $300 million annually to Vermont’s economy, particularly in the northeast Kingdom.” Scott added that he has contacted the Biden administration to express his concerns and advocate for a swift resolution.

The tariffs represent a shift in trade policy, reversing course from the United States-Mexico-Canada Agreement (USMCA) ratified in 2020. Experts suggest the move is aimed at appealing to a specific segment of the electorate ahead of the 2024 presidential election,but carries significant economic risks for states like vermont that rely heavily on cross-border trade.