Tariffs, immigration policy uncertainties pose risks to ‘sturdy’ growth, Maine state economist says

Photo / Soubanh Phanthay Maine State Economist Amanda Rector was the keynote speaker at Wednesday's Mainebiz "Five on the Future" forum, in South Portland.

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By Renee Cordes

Wide-ranging tariffs proposed by President-elect Donald Trump could potentially put a damper on Maine’s otherwise “sturdy” economy, Maine State Economist Amanda Rector told a Mainebiz forum on Wednesday.

Although it remains to be seen what the policies will be, the incoming president has threatened broad tariffs on China, Canada and Mexico — the country’s three largest trading partners — along with other targeted measures.

While limited trade restrictions might be “not that bad,” widespread measures may mean “things could be really, really bad,” Rector cautioned.

A total of 226 people attended the "Five on the Future" event, held at the DoubleTree by Hilton in South Portland.

On immigration, Rector noted that policies instituted under the first Trump administration had a “chilling effect” on international immigration.

If the new administration implements similar policies, that could have potentially significant implications for workforce shortages, driving up wages and prices, she warned.

'Sticky' inflation

While a decline in inflation led the Federal Reserve to cut interest rates three times in 2024, the cost of living rate has since leveled off.

Rector said that “sticky” inflation creates uncertainty about future interest rate cuts, saying there will be "maybe a couple of cuts this year, maybe not.”

Turning her attention closer to home, Rector gave a mostly upbeat outlook for Maine's economy despite continued housing and workforce challenges, adding, “2025 is starting out with a sturdy economy."

“We’re in good shape right now, but there is heightened uncertainty in terms of federal policies, and that could impact how things go in the next year," she said.

Despite continued high housing costs in Maine, one bright spot is that the state remains at the low end of monthly mortgage payment increases compared to other states in New England.

“If you’re coming from Massachusetts, Maine is still a bargain,” she said. Within Maine, 2023 data show that none of the 16 counties are "affordable" anymore compared to six counties that were deemed affordable in 2020.

Following her talk, Rector moderated a panel discussion with representatives of various industries across Maine.

Panelists included Tony DeLois, co-principal and chief operating officer of Uncommon Hospitality; Shannon Richards, founder and CEO of Hay Runner and president of the Maine Real Estate and Development Association; Clay Maker, co-president of Penobscot General Contractors; Bob Shultz, president and CFO of Puritan Medical Products; and Thomas College President Jeannine Diddle Uzzi.

The discussion touched on talent and workforce shortages, housing and construction, innovation in higher education, artificial intelligence and a host of other topics.