A new survey of over 400 Washington employers shows rising fears of a possible recession, concerns over tariffs, and ongoing challenges from state taxes and regulations.

In the quarterly survey conducted by the Association of Washington Business, 44% of respondents say they expect Washington’s economy to enter a recession in the next year, up from 17% in the previous quarterly survey.

Nearly three-quarters of respondents are concerned that President Trump’s tariff policy and retaliatory tariffs will have a negative impact on their business, and nearly half of respondents say they have already experienced negative impacts.

Of those businesses already affected, 76% say tariffs have raised the cost of business inputs, and 45% say tariffs have caused supply-chain disruptions.

“These numbers should be a flashing red light for lawmakers in Olympia as they debate passing the largest tax increases in state history,” says AWB President Kris Johnson in a press release. “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.”

Overall tax burden was the leading business challenge identified by survey respondents, followed by government regulations, inflation, cost of health care, and tariffs.