The economy of a relatively small state such as Connecticut is intertwined with the national economy and, in particular, the economic policies of the federal government.
The high tariff rates that the Trump administration had initially attempted to impose never materialized. The actual tariff rates, although higher than before, turned out to be substantially below those that were initially announced.
Moreover, businesses and investors have largely dismissed tariff-policy announcements due to frequent changes and backtracking. Consequently, because tariff rates have been lower than initially expected, both the U.S. and Connecticut economies have so far been largely spared the economic damage tariffs — which function as taxes — typically impose.
As a result, Connecticut’s outlook is stronger than it otherwise would have been. Absent unforeseen shocks, the state’s economy should continue to grow at a solid pace in 2026, generate a respectable number of jobs, and keep the unemployment rate relatively low.
Farhad Rassekh is a professor of economics at the University of Hartford.
