President Donald Trump’s tariff policy has, so far, been stop-and-go.

Earlier this month, he announced a 25 percent import tariff on Canada and Mexico, then paused it for a month. He’s added new duties to the import of steel and aluminum, expanded tariffs on China and plans to pursue reciprocal tariffs across a host of nations and industries.

Any good economist will say some version of “it depends” when asked to forecast the downstream effects of new policies — and my conversations with Nevada economists reinforced that truism. 

But even as Trump’s tariff policy is still being fleshed out, there are insights we can glean about how and why shifts in the global trade balance will impact what happens in Las Vegas.

The News of the Week: Tariffs

In his first term, Trump sought to move the U.S. toward a more protectionist trade policy via expanding tariffs, abandoning the embrace of free trade that had taken root in both parties for decades. Essentially a tax, tariffs are intended to bolster domestic production and manufacturing by placing a duty that companies must pay for importing foreign goods.

The positive case for tariffs is that they protect American industries and jobs, forcing companies to source American goods and helping to close America’s trade deficit, particularly with strategic opponents such as China. 

But because the global economy is so interconnected and many companies import foreign parts, food or fuel, the cost of the tariff may be — and usually is — passed onto consumers, raising the price of goods and services. In addition, other nations can impose retaliatory tariffs, suppressing the sale of American goods in foreign markets.

Trump spoke often of his fondness for tariffs on the campaign trail, but what he’ll do now in office is still unclear. On Monday, he imposed a 25 percent tariff on imports of aluminum and steel; on Thursday, he signed an executive order implementing tariff reciprocity, or setting U.S. tariff rates to the same percentage that other nations impose on the U.S., a move that portends significant disruption in the automotive and agricultural industries.

And while he paused a potential 25 percent tariff on Canadian and Mexican goods earlier in February, the prospect of a broader North American trade war looms over the economy.

“If you have a uniform tariff across everything, you're erecting a wall so that foreign producers have a harder time getting in and selling in the U.S. market, which means that domestic producers would have a better time selling,” said UNLV economist Stephen Miller. “But in order to prevent the foreigners from coming in, you erect the wall so prices domestically have to go up on all those items that are protected.”

The Nevada Angle

Nevada’s main export isn’t some manufactured good; rather, it’s fun — the experience of a trip to Las Vegas (or Lake Tahoe.) But that doesn’t mean we’d be insulated from a trade war.

The state itself is in a trade deficit — in 2023, according to the Observatory of Economic Complexity, Nevada had a negative trade balance of $702 million. Its top exports were gold and copper ore, while its top imports were telephones and circuits.

Jeremy Aguero, a principal analyst at economics research firm Applied Analysis, said Nevada’s principal industry — gaming — could be impacted by tariffs because of how much construction it requires. If tariffs are enacted on Canadian lumber, for example, that would likely raise the costs of new hotel and casino development — not to mention homebuilding.

Numerous Nevada casino properties have plans for renovations and expansions in coming years.

Aguero said the lack of tariff details makes it hard to forecast any one outcome for a Nevada industry or the state’s economy as a whole — if the tariffs are successful in bolstering domestic manufacturing, Nevada would benefit; if they raise prices on fuel, Nevada could suffer.

With the initial tariffs on aluminum and steel, Rep. Steven Horsford (D-NV) said that he’s heard primarily from local breweries about the potential for adverse impacts. Unsurprisingly, he’s against the policy change.

“At a time when we're trying to grow small businesses, to create economic diversification, we have an administration who is enacting tariffs — taxes — that hurt families, hurt workers and hurt small businesses,” he said.

The most important aspect for Nevada is not necessarily on any one industry, but rather its impact on broader consumer confidence. Southern Nevada’s economy, Aguero said, is built on people feeling financially comfortable enough to visit. If tariffs do indeed cause price shocks, the effects could be significant.

“If we put upward pressure on prices, what does that ultimately do to the economy as a whole, in a consumer-dependent economy like that in the state of Nevada, most notably that in Southern Nevada?” Aguero asked. “Could it then create a ripple effect that would reduce consumer spending and ultimately impact the number of people that make the decision to come and take a trip to Las Vegas?”

Aguero and Miller cautioned against jumping to any conclusions. Miller noted that in the short term, price changes don’t necessarily change consumer behavior — people don’t automatically buy less fuel when the price of gas goes up, he said, and so any impact on travel to Nevada could take time to occur.

And the biggest unknown is exactly how Trump plans to deploy future tariffs — whether they will be a blunt weapon applied equally or as a scalpel meant to extract specific policy outcomes from other countries.

For now, economists and businesses in Nevada are, like political observers, watching and waiting.

“We're watching how all the details flesh out with a lot of interest,” Aguero said. “Because right now, it’s heavy clouds, but no rain.”

Around the Capitol

💸TIP-off — Horsford held a press conference Thursday — along with Nevada Reps. Dina Titus, Susie Lee and restaurant workers from the One Fair Wage campaign — to reintroduce the TIPS Act. His bill combines the Trump campaign promise of ending taxes on tips with eliminating the subminimum wage for workers in tipped industries. And as Republicans contemplate how to include ending taxes on tips in their budget bill, Horsford took a shot at their proposal.

“Trump’s concept would solidify a loophole allowing the rich to gift their fortunes to their kids and to call the inheritance a ‘tip,’” Horsford said. “That’s a rip off.” 

✅Confirmation updates — Several more Trump nominees were confirmed this week, so it’s a good moment to check in on where Sens. Catherine Cortez Masto (D-NV) and Jacky Rosen (D-NV) have landed on the nominee slate. So far, Trump has had 16 nominees confirmed. Of those, Cortez Masto voted “yes” on four, and Rosen approved six. The two that they split on were CIA director John Ratcliffe and Transportation Secretary Sean Duffy.

The four nominees that received yes votes from both Nevada senators were Secretary of State Marco Rubio, Agriculture Secretary Brooke Rollins, Veterans Affairs Secretary Doug Collins and Interior Secretary Doug Burgum.

What I’m Reading

This is Reno: Rally highlights concerns over Medicaid and program cuts

As Republicans contemplate significant budget cuts, I expect this won’t be the last protest in front of Rep. Mark Amodei’s (R-NV) office.

The Nevada Independent: ‘No explanation as to why’: Nevada federal funding recipients navigating freezes

More than three weeks have passed since the issuance of Trump’s executive orders pausing IRA disbursements — and Nevada grantees are no closer to getting answers. 

Las Vegas Review-Journal: Homeowners, renters insurance to go up for 100K Nevadans

You heard it here first — housing is the political issue of the era.

Notable and Quotable

“At a time when Elon Musk and his hackers are causing the largest data breach in U.S. history, Republicans are doing nothing to hold them accountable.”

— Rep. Steven Horsford (D-NV), on DOGE access to U.S. Treasury data, launching a Musk-centric Democratic line of attack

Vote of the Week

H.R.35 — On Passage: Agent Raul Gonzalez Officer Safety Act

Another Republican bill on immigration designed (successfully) to split Democrats, this legislation mandates that any migrant fleeing Border Patrol in a motor vehicle within 100 miles of the border be imprisoned, fined and ultimately deported.

AMODEI: Yes

HORSFORD: No

LEE: Yes

TITUS: Yes