At their most basic, dictionary level, tariffs are simply a tax businesses have to pay on goods and materials brought in from other countries. Taxes on imported and exported goods.

You are hearing about them in the news a lot more lately because the Trump administration’s stated goal is to get businesses to manufacture more of what they need in the U.S., which would theoretically lead to more jobs. So, the thinking goes, taxing materials not made here encourages and protects the domestic manufacturing industry.

But the effects would be wide and varied in Colorado, and overall, tariffs mean higher prices for the state, the businesses and Coloradans – everywhere from the gas pumps to the grocery store.

The state treasurer said in a call March 6 that the tariffs President Donald Trump has announced would cost the state $1.4 billion every year.

As he promised during his campaign, Trump plans to impose steep new taxes on imports from three of the country’s biggest trading partners – China, Mexico and Canada.

Those taxes were supposed to go into effect on March 4, but two days later, Trump postponed 25% tariffs on many imports from Mexico and some imports from Canada for a month amid widespread fears of the economic fallout from a broader trade war.

The president continues to threaten additional tariffs – particularly for Canadian dairy and lumber – but when they might be imposed and how much they will be changes rapidly from day to day.

He said he still plans to impose “reciprocal” tariffs starting on April 2.

When, or if, the tariffs go into effect, it will unequivocally hit the state economy. Canada and Mexico are two of Colorado’s top trading partners, with almost $10 billion in activity.

State Treasurer Dave Young participated in a call March 6 with treasurers from Nevada, Illinois, Oregon and Minnesota to ask that Trump call off the tariffs and escalating trade war. He said the policies and repeated postponement have caused chaos, and he called it a “game of chicken.”

“Last year, we imported $6.5 billion in goods annually from these countries, and this includes machinery, computer, and electronic equipment, household appliances and other essential items that all of us use every day,” he said.

Young says yes, the state has a lot to lose on exports like oil and gas, beef, aerospace parts, power transmission equipment and entire industries like agriculture, aerospace and advanced manufacturing.

“Our state’s only refinery, Suncor, is based in Canada and accounts for 40% of our petroleum market,” he said. “In fact, oil and gas make up 62% of our Canadian imports.”

That means Coloradans can expect to pay more for gas.

It’s already pretty grim because the state budget is already $1.2 billion in the hole. Young said the state paid $7.4 million in tariffs on $6.5 billion of imports from Canada and Mexico in 2024.

“That’s an effective tax rate of about 0.12%. Taken together, these tariffs that are set to go into effect or are in effect will actually cost us $1.4 billion annually,” he said.

That would reduce Colorado’s already diminished spending powerless state revenue means cuts to behavioral health, public schools and other services like Medicaid.

Not to mention the impact on the state’s businesses. Even industries that Colorado has a reputation for fostering, like craft beer breweries, will face increasingly steeper costs.

And you can expect that it will come at the literal expense of consumers who will see higher prices everywhere.

At the most basic level, businesses will have to pay more for materials they import and will most likely pass the steeper costs on to consumers. So while the specific impact is uncertain, just the threat of imposing tariffs is raising concerns about ever-increasing prices, a falling stock market and retaliation against U.S. exporters.

Mark Zandi of Moody’s Analytics told NPR that the tariffs would cost the typical U.S. family $1,200 a year.

Right now, businesses have also been operating in a state of limbo, unsure of when or whether the import taxes would take hold. There are a lot of “what ifs.”

Some Colorado companies tried to get ahead of the tariffs before Trump took office. Estes Rockets, based in Penrose, is the country’s biggest manufacturer of model rockets for hobbyists – and a lot of its model parts come from China.

The company stocked up on those items in January. Estes has two shipping containers worth of parts that will supply them for the next 12 months, said Heidi Muckenthaler, vice president and general manager at Estes.

At this point, it’s a wait-until-April-2-and-see situation.

In his speech to a joint session of Congress on March 4, Trump portrayed tariffs – which he has also levied on China at 20% because of its role in fentanyl production – as a way to increase wealth and power for the United States.

But most economists expect the import duties to send U.S. prices higher, slow the economy and potentially cost jobs.

Trump appeared to acknowledge March 4 that there could be some pain: “There’ll be a little disturbance, but we’re OK with that. It won’t be much.”

NPR and The Associated Press contributed to this report.

To read more stories from Colorado Public Radio, visit www.cpr.org.