Colorado report warns tariffs hurting businesses and agriculture

DENVER — A new state report released late last week outlines broad economic strain tied to federal tariffs, which Colorado officials say are acting as a direct tax on businesses, farmers, ranchers and consumers across the state.

The report, prepared by the Colorado Office of Economic Development and International Trade, the Department of Agriculture and the Department of Labor and Employment, provides the most detailed look yet at how tariff policies are affecting key sectors. The analysis was ordered under Gov. Jared Polis‘ Executive Order D 2025 008 and follows related findings from the Office of State Planning and Budget.

“This report confirms what businesses, ranchers and families across Colorado have been experiencing for months,” Polis said. “Trump’s tariffs are a costly tax. Businesses are being forced to pass along higher costs, farmers are facing unpredictable markets and the people building Colorado’s economy are paying more because of the President’s trade war. Colorado will keep working to expand overseas markets for made-in-Colorado and grown-in-Colorado products.”

The agencies found that tariffs are disrupting business planning, increasing operating costs and creating market volatility across industries. According to the report, 86% of Colorado businesses viewed tariffs as a challenge, compared with 14% that reported any benefit. Among agricultural respondents, 80% anticipated continued negative effects, citing higher prices, sourcing difficulties and delivery delays.

Half of the agricultural respondents reported increased prices for aluminum, steel, copper, equipment and fertilizer, along with additional tariff-related charges passed along in supply chains.

Businesses Report Rising Costs and Lower Confidence

Interviews conducted by OEDIT with employers in construction, technology, retail, bioscience, energy and manufacturing show that tariffs are diverting money away from research, hiring, wages and innovation. Employers cited financial strain and rising costs as their top concerns.

The report found business leaders’ confidence in their ability to plan for the future dropped sharply, from 8.7 out of 10 before the tariffs to 2.4 after they took effect. Small businesses reported the greatest pressure, with some facing the decision to cut salaries, delay investments or close.

Agriculture Faces Volatile Markets and Higher Input Costs

The Department of Agriculture reported that farmers and ranchers are experiencing higher equipment, fertilizer and packaging costs along with shipping delays and uncertain access to global markets. Fertilizer costs have risen 37% since 2020, seed costs 18% and fuel and oil costs 32%. Labor costs have increased nearly 50% since 2020.

Commodity price swings continue to destabilize rural communities. In the San Luis Valley, potato growers report production costs of eight to eleven dollars per hundredweight, while returns have hovered at five to six dollars, resulting in losses of about 150,000 dollars per crop circle.

Producers also expressed concern about the upcoming 2026 review of the US-Mexico-Canada Agreement, uncertainty around exports to Japan and South Korea, potential retaliatory actions from China and the expected arrival of Argentinian beef in U.S. markets.

State Responds With Worker and Business Support

Colorado officials say they are taking steps to protect workers and stabilize the economy as federal tariff policies and other national decisions create uncertainty for businesses and the state budget. Many companies are slowing hiring, delaying expansions or postponing capital projects.

The Department of Labor and Employment outlined several measures to address potential disruptions, including expanded Rapid Response services, layoff-prevention tools such as Work Share, sector-specific outreach, enhanced monitoring of unemployment claims and improvements to the unemployment insurance system to support faster processing.

State leaders say the steps will help Colorado safeguard its workforce and maintain economic stability if conditions worsen.

Polis said addressing the economic effects of tariffs will be a major focus during the upcoming legislative session. He said the administration will work with lawmakers to pursue policies aimed at strengthening the economy, supporting producers and protecting the state from further disruptions tied to federal actions.