‘Everybody agrees it's going to cause pain': Utah governor on tariffs, possible recession

Yahoo

17-04-2025

Gov. Spencer Cox speaks with members of the media during the PBS Utah Governor's Monthly News Conference at the Eccles Broadcast Center in Salt Lake City on Thursday, April 17, 2025. (Pool photo by Kristen Murphy/Deseret News)
Utah Gov. Spencer Cox — a Republican who has called tariffs a 'huge gamble' but also said that he hopes 'President Trump is right' about them — said state officials are continuing to monitor their impacts on Utah businesses, and that the state's smaller businesses are 'going to be hit the hardest.'
Cox also said he's instructed state agencies to prepare for possible budget cuts if a recession hits the U.S.
'We're always planning for the worst. That's part of what we do every year, and we're one of the few states that does that,' Cox told reporters during his monthly PBS Utah news conference on Thursday. 'But look, I look at the data just like everyone else, and the possibility of a recession has gone up significantly. Certainly the trade wars have played a role in that.'
Regardless of 'whether you think trade wars are good or bad or will lead to something better, everybody agrees that it's going to cause pain in the short term.'
'And we have to be ready for that,' he said.
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During a separate news conference earlier this week, on Tuesday, when he and Republican legislative leaders celebrated Utah's 18th year being ranked No. 1 in the nation for best economic outlook, Cox said he had 'instructed all of my department heads to come up with recession plans, looking at three different levels of cuts … if there is a recession.'
Cox said Thursday that state leaders 'will be very cautious in our spending' heading into July 1, when the state's fiscal year starts, and 'we'll adjust accordingly.'
For 18th year, Utah ranks No. 1 for best economic outlook. What could threaten its top spot?
The Utah Legislature is already expected to convene in a special session in May to tackle issues the governor outlined in a veto letter he issued March 27, to make changes to at least two bills — HB263, a bill dealing with election transparency and HB356, a bill requiring some counties to elect district-based council members.
During that special session, he also said he wants the Legislature to repurpose $3.5 million it had set aside as part of Utah's bid to keep the Sundance Film Festival, which opted instead to move to Colorado.
It's possible, depending on national developments and impacts to the economy, that state leaders could also consider budget changes during a special session, but that remains to be seen.
Pressed on how state leaders will ensure 'equity' among state agencies if there are budget cuts so that some services, like social services, aren't overly impacted, Cox said 'the Legislature ultimately controls the purse,' but he also added 'we would be equitable in those types of cuts.'
Cox also said Utah leaders did something similar during the Great Recession.
'We took some across-the-board cuts, but then we let the experts who run those departments figure out how to implement those,' he said. 'Because in recessionary times, there are some places where you would want to increase the budget and others where you would want to decrease it more.'
He presented a hypothetical scenario of a 3% cut. 'It doesn't mean you cut 3% from every program, but every department would have to find those 3% cuts in their own ways that make sense and continue to serve the people in the state,' he said.
Cox — who went on a trade mission to Canada last week — said he's 'concerned about the small businesses that are going to be impacted by this.'
However, he also said he's 'hopeful' that leaders on both sides can 'figure out' solutions.
Excluding gold exported to the United Kington for refinement, Canada, Mexico and China are among Utah's top trade partners.
Utah exported $1.3 billion and imported $4.9 billion in goods from Mexico in 2023, according to a recent report from the University of Utah's Kem C. Gardner Policy Institute. Canada is the second biggest source of Utah's imports, with $3.1 billion in imports and $1.7 billion in exports that year. China ranks No. 3, with Utah taking in $2.7 million in imports from the country and exporting $1.2 billion.
Two industries Cox discussed Thursday as being impacted included manufacturing and housing. On the latter, he said he's 'always concerned about the price of housing and what that means for our state and our country.'
He said World Trade Center Utah and the Governor's Office of Economic Development are staying in touch with Utah manufacturing companies and 'helping them find new suppliers and better, cheaper ways to make their product.'
Utah GOP leaders defend Trump's tariffs while bracing for economic 'turbulence'
'We've had some incentives in the past and we'll be increasing those to move manufacturing here, which is why we led the nation in manufacturing (job growth) last year,' he said.
Most of all, Cox said he hopes national leaders will at some point soon provide more stability and certainty when it comes to tariffs. He said he's 'supportive of getting pieces of this right, and so I'm grateful that we have an administration that's willing to look at this.'
'I'm hopeful for more certainty,' he said. 'Businesses can be resilient. Capital is a coward, for sure, but once you know the rules, business and entrepreneurs will figure out a way to work around whatever those parameters are. It's harder when you don't know what the rules are going forward … so more than anything, we just need to get this nailed down as soon as possible.'
On his conversations with Canadian leaders during his trade mission last week, Cox said, 'our Canadian counterparts absolutely agreed that we should be pushing back on China and some of their unfair practices and some of their own tariffs and other issues.'
But 'that being said,' Cox said, 'there are still a lot of companies that manufacture out of China, especially smaller companies in Utah who are going to be hit the hardest.'
'There are lots of companies that are just going to be hurt, there's not much we can do about it other than trying to help them,' he said.
Pressed on Canada leaders' message to him about tariffs, Cox said 'their message is exactly what you would expect and what you've heard from the premiers there and from the Prime Minister.'
'You know, they felt really disheartened, I guess would be one way to say it,' he said. 'Some used the word, kind of, betrayed, that they're our closest ally and friend. … And yet, there was also a recognition by many of them that they needed to make some changes in Canada as well, which I think is helpful.'
Cox added that Canada 'has had very high tariffs on several of their products,' including dairy and lumber, and also has 'trade barriers' between its own provinces. He said they also recognized 'they needed to invest more in their security and defense as well.'
'So it was interesting to hear this, this recognition that they did need to make some changes, and were willing to do that,' he said. 'But yeah, obviously they were very hurt. We're their overwhelmingly large trading partner, and they're going to try to diversify more of their trade with other places, but we want to continue that partnership.'
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