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President Trump announcing steep tariff's on all exporters to the US yesterday, with rates ranging from ten percent to over fifty percent, which his administration says aimed to counter large trade imbalances with other countries. But the levies are also expected to have consequences here at home, and for a look at how individual states are bracing for them, we turn now to the Democratic Governor of New York, Kathy Hochel. Governor, thank you for joining us here on Bloomberg TV and radio.
I'm curious what you're already hearing from businesses and companies in your state, and whether they are already suggesting they are making changes on hiring practices, on pricing, for example, or if they are playing wait and see here to see whether or not this actually sticks.
No, thank you for having me now.
The impact is immediate and this is nothing short of the largest tax increase in American's history, and the.
Impact on New York. Let me explain.
This is the tenth largest economy in the world.
We have Wall Street, we have farms.
We have a border four hundred and fifty miles with Canada, so we have a trade relationship with Canada for fifty billion dollars.
So already here's what we're.
Seeing, droppings and bookings from Canadians coming to New York State, a huge source of tourism all the way to New York City, but's certainly my hometown of Buffalo where Canadians come over all the time and they go to our sporting of as they shop in our source.
So here's number one.
Sales tax revenues are dropping already now. Speaking to a farmer in a very republican part of our state called Stefanic Country in the North Country, he told me that as a dairy farmer, he gets his shavings, he gets his fertilizer, he gets all these products from Canada, and his costs are going up ten thousand dollars a month a dairy farmer, not the total cost, but an increase of ten thousand dollars a month.
So there's much anxiety now.
Not to mention the Walmart mom who goes to Walmart like I did when my kids were little, that giant grocery cart with the oversized diapers and lots of baby food.
And paper towels.
That's going to have an impact on people shopping at Walmart who come out of the trailer park park like the one my parents grew up in. So I have to say it goes all the way from Wall Street to the farmers, to the small towns, main street, the Wall Street. There is a cataclysmic effect on this and its New Yorkers are reeling right now.
Hear where you're coming from here, Governor. I wonder if there's a silver lining in any of this for the great industrial towns of your state from the last century, Syracuse, Rochester. Based on what we're hearing from this administration, they will again have a seat at the manufacturing table. Do you believe that?
I hope so.
But we already have advanced manufacturing coming to New York. I literally got off the phone with someone who's in a pharmaceutical business looking all over the world, and he's very likely with the deal I'm making to come to New York. So we have advanced manufacturer, we have pharmaceuticals. In fact, I was able to lure Micron with one hundred billion dollar investment, the largest in our nation's history,
to build the semiconductors in the Syracuse area. So we're already reimagining our economy based on manufacturing, so that's important to me. I come from Buffalo. I mean, my dad worked at the Steel Plan. I know how hard it is when businesses leave. But we are backfilling in with businesses that we think will have a long term future.
And they'll be affected by this.
The component parts to what they're building and the supply chain. They're going to see an increased cost, not just because they're in New York, but because they're in America.
And that's what worries me.
There could be a silver lining. As you say, I don't know how old I'm going to be when that happens. I mean, what are they going to do? Start building factories now? And I just don't know. All I know is that people are promised lower prices on inauguration Day and guess what they're going up?
Well, is there anything you can do about that? Governor? Regardless of what policy is set by the federal executive, you, as a state executive, are there levers you can pull to help offset any economic pain that results from these tariff policies.
I've had to have this conversation.
I'm assembling some of the smartest economists in the country to help give us advice on this.
This is an unforced error. This did not have to be this way.
And yes, you can use tariffs as as a tool to negotiate or have something in moderation. But this is so extreme and so immediate that I need to figure out with some real experts on what this is going to do. But I'll tell you what's going to happen. Wall Street goes down next January, and I'm looking at my revenues that are coming in from Wall Street bonuses where I fund a lot of the generous programs we
hear in our state that's going to be lower. I'm gonna have to look at where we're going to have to cut there. I have to look at the whole picture. Now in the context of the budget, I'm negotiating the revenues I count on the revenues I'm going to lose, but also the impact on our businesses.
Who may not be expanding now.
So I have to find ways we can use state resources to say will help comment down what I can do for a farmer and upstate New York. That's a good question. I don't want them to suffer. Thirty two thousand farms in our state. People think of New York as just Manhattan. I know they do, but it's so much more than that. An important part of our economy is our agricultural sector.
So all of our sectors are going to be hurt.
So I have to look at our budget what we can do to help other incentives for economic development. And as I'm doing, I'm trying to put money back in people's pockets. I mean, the average New Yorker will have six thousand dollars less than their pockets because of these tariffs,
and that's an opinion by a number of economists. I have a budget I'm negotiating right now that puts five thousand dollars back in people's pockets, child tax credits, a middle class tax cut the largest in seventy years, the largest tax rate decrease in seventy years, an inflation rebate for people paid so much more in sales tax. So I have a path put all this money back in
their pockets. You know what's really said, that's going to be sucked right out with a six thousand dollars they're going to lose because of tariff.
So I'll keep.
Fighting, I'll keep doing what I can do. But this is a real hit on New Yorkers.
So it sounds like the potential for state tax cuts in the year ahead depend on tax receipts from Wall Street. Governor, Is that right? Oh?
It always does.
I mean, I've not had an increase in our income tax because I want to make sure high net worth people know we appreciate.
Them, and I don't want to drive them out of our state. So that's that's my view.
But does it increase the urgency behind extending the Trump tax cuts and eliminating the salt cap because a lot of Republican members of Congress and your state are working to do that.
Now, well, they better be successful.
We want to make sure that the salt deduction, state local tax deduction is brought back one hundred percent. Absolutely, and I have seven Republican members at Congress. You better win on this one because you promised your voters you would.
Governor.
Before we let you go, our time is short. But I do want to ask you about New York City Mayor Eric Adams, who of course had charges against him dismissed. He now says he will continue his mayoral campaign for reelection, but as an independent. During the height of that controversy. You said it will be up to the voters to choose who they want to be mayor. You opted not
to force him out of the position. Even if you're not going to endorse anyone, would you encourage New Yorkers to reconsider a vote for him as an independent.
All I'm going to say is my job is to work with whomever's in the White House. I have a relationship with Donald Trump based on our mutual interest and building infrastructure and working on projects like Penn Station, but not allies when I don't support many of his policies.
Same thing with the Mayor of New York.
No matter who is sitting in that seat that the voters of New York decide they want me to work with, I will do that, but always stand up for the rights of the entire state and focus on my agenda of affordability and public safety.
Treat to have you with the s govenor. Come see us again. New York Governor Kathy Hochel with a sun dalance.
Thank you,