R.I. Secretary of Commerce Elizabeth M. Tanner had one piece of advice for businesses and organizations in Rhode Island that buy products overseas during a panel discussion at Providence Business News’ Economic Trends Summit held at the Providence Marriott on Jan. 30.
“Buy now,” she said, implying that the costs of imports are going to go up.
Just days later, President Donald Trump put threats to impose stiff tariffs on Canadian and Mexican imports on pause, but still the danger that the U.S. could enter a trade war with its neighbors, and China, was making some at the summit uncomfortable.
And tariffs were just one economic uncertainty discussed by panelists, who made up a cross section of industries, from banking to real estate to education, public and private, state and municipal.
There are also new challenges facing the state’s nonprofit sector, which is dealing with the risk of losing at least some of its state funding because of a gaping budget deficit and federal funding because of a Trump administration that’s looking to cut spending.
And not to be outdone, the state’s nascent offshore wind industry is facing new threats, living under an unfriendly White House in the middle of its long-term goal to make Rhode Island an outsized renewable energy hub.
Tanner said there are economic development efforts in the state that could be disrupted by the Trump administration policy choices. Many upstart companies looking for long-term growth in renewables, for example, rely on the workforce development and technical assistance and training programs run through quasi-public and state agencies for their talent pipelines.
“This affects all of us,” she said. “We do expect there will be less grant opportunities. Less energy. Less for things that Rhode Island cares about. So, we are doing our best to shore up what we have.”
And nonprofits are especially vulnerable, Tanner said.
“There is already a nonprofit recession we are seeing. There is a lot of federal money they have relied upon. And they don’t know a world where there is not a ton of funding for them,” she said.
Higher education institutions such as Brown University and the University of Rhode Island – which has been striving to create more programs servicing the renewable energy economy – could also be at risk.
And the timing makes all of this particularly troublesome, Tanner said, noting how many university-run grant programs are scheduled to receive funds right before the summer.
“We are talking about billions of dollars,” she said. “That could affect some of the partnership work that happens with higher education.”
Panelist Leeds Mitchell IV, principal broker and partner at MG Commercial Real Estate Services Inc., is seeing the same uncertainty from nonprofits, partly because many property owners prefer multiyear leases.
“Many nonprofits and social service organizations are looking for space, but they are scared about their funding,” he said. “They can’t forecast where this is going. And as a result, they can’t commit to lease terms.”
Also on the panel were Edwin “Ted” Carr, Providence director of economic development; Harold M. Horvat, Centreville Bank chairman, CEO and president; Sylvia Maxfield, interim provost and senior vice president for academic affairs at Providence College; and Kristen Adamo, CEO and president of the Providence Warwick Convention & Visitors Bureau.
In fact, perhaps the most startling revelation on the potential fallout came from Adamo, who said a large offshore wind organization – which she declined to identify – recently pulled out of its planned booking of the R.I. Convention Center. The event would have contributed $1.9 million to the local economy, Adamo said.
All of this comes at a time as corporate giving is declining. And while trickle-down economics is certainly good for the private sector’s bottom line, it is unlikely these companies – emerging from years of inflation and other challenges – will be shelling out large portions of their newfound revenue to Rhode Island nonprofits, Adamo said.
And since the state is also strapped for cash, the options become limited.
“It’s unrealistic to ask the state to cover those [funding] holes,” she said.
Horvat said while the bank was excited to invest $1.8 million through its charitable foundation in local community organizations last year, the largest in its history, it was dampened by one caveat.
“We had to turn down the same amount of money,” he said. “We had $3.6 million in requests. There is only so much we can do.”
Larger organizations such as WaterFire Providence, a “signature event” in the city for which Adamo serves on the board of directors, may weather the new reality, she said. The organization recently ran into fiscal trouble before receiving a state bailout to ensure another season.
But what about the smaller organizations, Adamo asked.
“How are they going to survive?” she said.
