New survey of more than 400 Washington employers shows widespread concern about tariffs; in response, 35% will delay capital expenditures, 32% will absorb higher costs, 19% will implement hiring freeze, 12% will reduce or eliminate salary increases

April 18, 2025 (Targeted News Service (Press Releases)) –

OLYMPIA, Washington , April 18 -- The Association of Washington Business issued the following news release:

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Employer Survey Finds Taxes and Tariffs on Collision Course with Economy

Survey of 400+ Washington employers shows growing recession concerns amid tax debate in Olympia and D.C. tariff turmoil

OLYMPIA - A new survey of Washington employers shows rapidly rising recession fears, widespread concern about negative impacts from tariffs and ongoing challenges from taxes and regulations.

The quarterly survey conducted by the Association of Washington Business revealed a sharp change in attitude from January, with 44% of respondents now saying they expect Washington's economy to enter a recession in the next year, up from 17% in the prior survey. The state's overall tax burden continued to rank as the biggest challenge facing businesses.

Employers showed broad concern about tariffs and retaliatory tariffs, with nearly three quarters saying tariffs will have a negative impact on their business and nearly half saying they have already experienced negative impacts. Of those businesses already affected, 76% said tariffs have raised the cost of business inputs and nearly half (45%) said tariffs have caused supply chain disruptions.

As a result, business leaders are considering a range of responses, from delaying planned capital expenditures (35%) and absorbing higher costs (32%) to implementing a hiring freeze (19%) and reducing or eliminating planned salary increases (12%). A smaller number are making plans to lay off staff (10%), and 5% have already implemented staff layoffs.

"These numbers should be a flashing red light for lawmakers in Olympia as they debate passing the largest tax increases in state history," said AWB President Kris Johnson . " Washington employers are bracing for impact from federal tariffs and preparing for a recession that now seems far more likely than it did just a few months ago. They're cutting back on new spending, pushing pause on hiring, absorbing higher costs where possible and raising prices where they must. And they continue to cite Washington's tax burden as their biggest challenge. This is all coming on the heels of years of spiking inflation and supply chain disruptions that have not been fully resolved. It's difficult to comprehend how state lawmakers could think this is a good time to enact $12 billion in new taxes that we know will hurt businesses, make it harder to retain employees, and raise prices for everyone. It's alarming, tone-deaf and short-sighted."

Despite the challenges facing them, most employers rated the current Washington economy as moderate or strong, with about a quarter saying it's weak or very weak, roughly the same description as a year ago. Similarly, most survey respondents said their business is flat (42%) or growing (24%) with fewer saying it's beginning to experience a downturn (23%) or struggling (11%), also similar to responses in the April 2024 survey.

The top five business challenges identified by survey respondents were:

1. Overall tax burden

2. Government regulations

3. Inflation

4. Cost of health care

5. Tariffs

The Spring 2025 Washington Employers Survey report can be found here.

AWB conducts the Washington Employers Survey quarterly. The Spring 2025 survey is based on 444 responses collected by email from business owners and operators across Washington between April 9-17, 2025 . Seventy-two percent of respondents have 50 or fewer employees. Thirty-six percent are manufacturers, 10% are services, IT or professional, and 9% are construction. Other categories of employers who responded include retail, wholesale, finance, agriculture and forestry, health care and restaurants.

REPORT: https://www.awb.org/wp-content/uploads/AWB_Employer_Survey_041725.pdf

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Original text here: https://www.awb.org/employer-survey-finds-taxes-and-tariffs-on-collision-course-with-economy/