President Donald Trump’s widespread use of tariffs as part of his “Made in America” agenda is increasing costs for Colorado industries and consumers, according to a new report from the governor’s office. 

Gov. Jared Polis, a consistent critic of the Trump administration’s tariff policies, released a 98-page report on Thursday that examines the various economic effects that current tariffs are having in Colorado. Tariffs are taxes on goods purchased from other countries, and their rates usually equal a percentage of the product’s value. 

The report, conducted by the governor’s Office of State Budgeting and Planning, was commissioned as part of an executive order issued by Polis in July to identify strategies to blunt the impacts of Trump’s tariff policy. 

“I’ve long been a critic of tariffs, no matter who pursues them,” Polis told reporters on Thursday. “That includes the first Trump administration, that includes calling out President Biden for solar tariffs.” 

Among the report’s key findings: the overall tariff rate in Colorado — the average of all current tariff rates — has increased sevenfold since 2024, rising from 3% to 21%. 

The report states that tariffs are “expected to slow economic activity by weakening consumer demand, which will result in lower spending, falling business profits, slower wage growth, and a weaker asset market.”

Trump’s tariff policy has ebbed and flowed since he began his second term in January, with pauses, delays and exemptions that the administration says are part of its global trade negotiations. 

Still, the president has been able to implement a swath of tariffs on specific goods and countries, including a 10% baseline tariff on most imports and 50% tariffs on steel, aluminum and copper imports. The Trump administration has boasted about increased tariff revenue for the U.S. and promoted its strategy as one aimed at spurring more domestic production of goods. 

Critics, however, argue that tariffs effectively amount to price increases on goods and services, as businesses usually pass the increased cost of imports onto consumers. Reciprocal tariffs, which a country imposes in retaliation for tariffs imposed on it, can also further drive up the costs of global trade. 

“Tariffs are really self-inflicted wounds on our economy,” said Polis, who called Trump’s actions a “trade war.” 

The governor’s report identifies by region which industries in Colorado are most susceptible to current tariffs. 

For western Colorado, those industries are construction, energy, health care, and durable and non-durable goods, like household electronics, appliances and clothing. The report estimates that the increased cost to consumers for durable and non-durable goods alone could be over $600 million. 

In the central and northern mountain regions specifically, the most susceptible industry is construction. Tariffs on building materials, including lumber, steel, aluminum and copper, are projected to increase construction costs for new homes by 4% to 6%, according to the report. 

For a new home that would have originally been priced at $750,000, for example, a 4% to 6% increase would mean a $30,000 to $45,000 jump in the home’s final price. The report goes on to say that price increases would lead to higher home valuations, which means increased homeowners insurance and property tax costs. 

In other cases, tariffs may dissuade new development altogether. 

The governor’s office had expected a 3.9% increase in new Colorado housing construction permits this year, but permit data for the first six months of 2025 have fallen short of expectations by a half a percentage point, according to the report. 

Polis, who has made efforts to lower housing costs a cornerstone of his second-term agenda, said the current tariff policy “works counter to that goal — it makes housing less affordable in Colorado.”

In terms of jobs, current tariff policies are projected to increase Colorado’s unemployment rate by 0.4% in 2026, pushing Colorado’s average unemployment rate to 5%. 

Jeff Kraft, deputy director for the Colorado Office of Economic Development and International Trade, said tariff impacts could be especially painful for the state’s 715,000 small businesses, which collectively employ nearly half the state’s workforce. 

“These businesses play a particularly important role in rural Colorado … and they are least well equipped to handle the confusion and uncertainty associated with tariffs and changing tariffs,” Kraft said. “So their owners face agonizing choices: do they lay someone off, do they cut salaries, do they cut their own salary, do they go out of business?”

Kraft said those are the conversations “we’re hearing every day,” adding that small business challenges can greatly derail smaller, rural communities. 

Colorado is currently engaged in a multistate lawsuit challenging the constitutionality of some of Trump’s tariffs, arguing that the power to impose tariffs lies with Congress, not the president. An appeals court in late August ruled that most of Trump’s tariffs are illegal, and Trump quickly appealed the case to the U.S. Supreme Court.

Polis said he’s hopeful Colorado prevails in the case, but added there are other avenues for stopping Trump’s tariff policy. He called on Congress to pass legislation to limit the president’s authority over tariffs, which he said could be included in the federal spending bills that lawmakers are currently considering.