Trump's actions cut a wide swath across Hawaii's economy

As President Donald Trump continues to make large changes to the federal government, one state more than 4,700 miles from the White House is reportedly already feeling a significant financial burden. Hawaii is reportedly dealing with problems in several of its economic sectors as a result of Trump's policies, which have left many in the Aloha State concerned for their future.

Hawaii's agriculture and tourism industries could be among the hardest hit of any state in the country as Trump pauses funding for federal farming programs, and his global tariffs are expected to slow tourism across the United States. Many Hawaiians have cast doubt on the state's financial health and are worried that cuts to federal programs could directly affect them.

Farming funds

Agriculture is one industry where Hawaiians could feel burdened. There are about 6,500 farmers in the state, according to the USDA's 2022 Census of Agriculture. But since Trump "paused funds from the Inflation Reduction Act and cut other U.S. Department of Agriculture programs, nearly $90 million in funding for Hawaii and Pacific region farms and food system organizations has been frozen or cut," said NBC News.

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This has led to "great confusion among local farmers about what is frozen and what is not," said Hawaii Farm Bureau Executive Director Brian Miyamoto to NBC. The Environmental Quality Incentives Program, which "provides technical and financial assistance to agricultural producers, is safe for now." But other farming-related programs "may have had their funding frozen" or face uncertain futures.

Hawaii's farming industry already suffers from many logistical issues due to its location; about 90% of the island state's food is imported. This makes it "hard for local farmers to keep prices competitive," and the "high cost of locally grown food often deters price-conscious consumers," said Hawaii News Now. But now there is "new anxiety about cuts to federal subsidies and USDA programs on top of ongoing challenges."

Tourism dollars

Tourism is one of Hawaii's biggest industries; more than 9.6 million people visited the Hawaiian Islands in 2024, according to the Hawaii Department of Business, Economic Development & Tourism. But some of Trump's "policy reversals and delays have made it difficult for Hawaii's visitor industry to know where tourism will end up," said the Honolulu Star-Advertiser.

In particular, Trump's tariffs on Canada, which have drawn the ire of Canadian tourists, could "broadly dampen international arrivals to Hawaii, which in many markets still are struggling to recover to prepandemic levels," said the Star-Advertiser. About 5% of Hawaiian tourists are Canadian. But the tariffs could also affect the 75% of Hawaiian tourists who are American, and many are "concerned that tariff-related trade wars could hurt Hawaii's bread-and-butter U.S. consumers, who ultimately will pay more for goods and serv­ices, causing them to pull back on luxury and long-haul travel."

Beyond this, a "suddenly imposed ban on travel by federal employees has left hotel rooms unexpectedly empty," said the Honolulu Civil Beat. There has been a "massive drop in government travel," and "properties are scrambling to make up for the loss," Alvin Wong, the director of sales and marketing for the Waikiki Beach Marriott Resort and Spa, said to the Civil Beat. Some economists have also said that the "barrage of new policies and cost-cutting initiatives had in many cases left them stumped about the likely impacts."

Medicare and Medicaid cuts

Ever since Trump retook office, reports have circulated about potential cuts to Medicare and Medicaid subsidies, which could significantly affect Hawaiians. The two programs reportedly provide services for nearly 50% of the state: 305,000 Hawaiians were enrolled in Medicare in 2024, according to Healthinsurance.gov, and 406,000 were enrolled in Medicaid, according to Medquest.

Hawaiians "would be unable to come up with the funding likely to take care of their diabetes or their heart disease or other serious problems that they have" if cuts occur, Dr. Jack Lewin, the administrator of the Hawaii Health Planning & Development Agency, said to Hawaii Public Radio. This would lead to "significant crises in terms of preventable morbidity and mortality across a population of people," as there "aren't that many discretionary areas that can be cut effectively" without causing harm.

However, Hawaii health care workers are urging caution for now. The American "people have to know that what we stand for is for them," said Rep. Jill Tokuda (D-Hawaii) to KITV Honolulu. Championing rural health, in particular, is "absolutely what we need in Hawaii."

Tariffs and overall costs

The tariffs, which Trump has implemented on imports from every other country in the world, could raise prices across the U.S., with Hawaii bearing the brunt of these increases. The "cost of basic necessities is expected to rise even more here in the islands," said KITV, with everything from food to building materials expected to go up in price. These building material increases could exacerbate the state's already dire housing crisis and "also lead to higher prices of most all other goods."

This could "price out future first-time home buyers, especially," said Andrew Pereira, a spokesman for the Pacific Resource Partnership, to KITV. Buying a car could also become pricey in Hawaii. Hawaiian auto dealers ended 2024 on a down note but were "expecting a rebound this year until the enthusiasm was abruptly halted" by Trump's tariffs, said the Star-Advertiser. Dealers are "concerned there could be higher prices in Hawaii," Melissa Pavlicek, the executive director of the Hawaii Automobile Dealers Association, said to the outlet.

Auto dealers were "caught off guard because there was little to no mention of tariffs on foreign auto imports during the run-up to the November election," said the Star-Advertiser. But Trump's 25% tariffs on these imports have now gone into effect, and because Hawaii represents a key trading territory between Asian markets and the West Coast, it "could be particularly vulnerable to a trade war triggered by Trump's ongoing tariffs."

In total, the University of Hawaii Economic Research Organization estimates that Trump's actions "could result in the loss of more than 2,000 local jobs, placing Hawaii's economy at risk of recession," said KHON-TV Honolulu. Hawaii will "feel the adverse effects of federal policies over the next several years, pulling job growth to zero and real GDP growth down to 1.6%" in 2025, according to the university. This could eventually lead to a "recession and undermine long-term growth prospects."