Colorado governor and small businesses say tariffs have negative impact on state

Gov. Jared Polis says Coloradans are paying more now due to President Donald Trump's tariff policies. The governor says tariffs are impacting groceries, health care, school supplies and more.

Earlier this week, Trump defended the tariffs. "If you took away tariffs, we could end up being a third world country," Trump said.

On Thursday, Polis shared a report that estimates the impact on Colorado of changing federal tariffs. The report from the Office of State Planning and Budgeting was the result of an executive order signed by the governor in July.

It found that the effective tariff rate for Colorado has increased from 3% last year to 21% now, and that the state's hardest hit industries are agriculture, construction and aerospace.

"Today, Coloradans are paying seven times more in tariff taxes than one year ago," Polis said. "We're already feeling the pain and increased tariffs costs on building materials like lumber, steel, aluminum, copper are raising costs for new housing."

As Polis condemns tariffs, a small business in the Evergreen foothills is feeling their impact.

"Music and vinyl and just great sound is my passion," said Shaun Beall.

Beall founded Tactile Audio Furniture in his backyard.

"This started off as just a hobby business. I built a piece of furniture in my backyard about 10 years ago, and I didn't own a tool or anything at that time," Beall said. "It slowly became a real business and now is our family livelihood, and we've grown into a small but successful manufacturing business. We employ people from right here in the neighborhood."

Ten years later, his yard is still where the Evergreen businessman manufactures 100% of their goods.

"Everything that we make here is around elevating the audio experience. We believe that your music should look as good as it sounds, and we make furniture to help support that," Beall said.

But Beall says his American-made business is not immune to tariffs.

"Just because something is made in America, it's very rare that something is 100% sourced locally and manufactured locally. We, like anybody, rely on tools and supplies that can come from anywhere," Beall said. "We have to be global to some extent. And that's just everyone's reality."

Tactile gets some of its wood from overseas, and a hi-fi isolator, which they need for a new product line, comes from China.

"This is not available anywhere in the U.S., and so it's a small part, but it's critical to making the thing that we're trying to make effective," Beall said.

The White House has said that tariffs will "re-shore manufacturing, and drive economic growth for the American people." But Beall says they're hurting businesses like his.

"Uncertainty is what hurts the most," Beall said. "When you don't know what the price is going to be or what the availability is going to be, it makes it super hard to go to market on a product."

Because of tariffs, Tactile has had to delay the launch of its new product line and find a balance between absorbing costs, raising prices and cutting staff.

"It stunts our ability to, like, move as fast and be as competitive as we want to be," Beall said.

Polis says if tariffs remain high, more Colorado businesses will find themselves struggling, and consumers will pay the price.

"Everyone loses a trade war. Everyone loses a tariff war. It's a race to the bottom. Today, it's been estimated that over 20% of the tariff costs are being passed along directly to consumers. That number is expected to increase by 50% as businesses run through their pre-tariff inventories," Polis said.

Colorado is still involved in a legal battle with the Trump administration over the tariffs, which could go to the U.S. Supreme Court as soon as next month.

The full report is available here.