Connecticut leaders are breathing a sigh of relief after President Donald Trump paused sweeping tariffs against Canada and Mexico for one month. Higher taxes on Chinese imports were still set to take effect on Tuesday.

But politicians on both sides of the aisle are still nervous about the future. They warned that residents could pay even higher electricity prices. Tariffs could also hurt key manufacturers like Sikorsky, Pratt & Whitney and Electric Boat.

Trump paused tariffs against both of the U.S.’s neighbors on Monday, just hours before a 25% tax on most goods were set to go into effect.

Mexican President Claudia Sheinbaum agreed to send 10,000 members of her country’s National Guard to the border to address drug trafficking, and Canadian Prime Minister Justin Trudeau agreed to spend an extra $200 million on a fentanyl czar and a Canada-U.S. Joint Strike Force to combat organized crime

Trump’s taxes against China were still slated to go into effect Tuesday, although talks were ongoing Monday afternoon.

The president has offered conflicting reasons for the tariffs. Previously, he cited illegal immigration and fentanyl – although less than 1% of migrants and fentanyl arrived from Canada, according to Customers and Border Protection records.

On Monday, Trump offered a different reason.

“Canada has been very abusive of the United States for many years,” he told reporters. “They don’t allow our banks. Did you know that? Canada does not allow banks to go in. If you think about it, that’s pretty amazing.”

Trump also indicated that more import taxes could be coming against China.

“If we can’t make a deal with China, then the tariffs will be very, very substantial,” he said at the Oval Office Monday afternoon.

Here in Connecticut, political leaders are nervous that tariffs are still on the table – especially against Canada.

Economists warn that electric rates – already some of the highest in the nation – could go up. Trump plans to impose a 10% tax on energy from north of the border. Canada and New York supply 9% of the New England grid’s power – although during the winter, Canadian hydropower makes up nearly a quarter of the grid.

“We are seeking guidance from the administration on what, if any, role ISO New England will be required to have in implementing these tariffs,” ISO New England, the region’s shared electric grid, said in a statement. “We cannot speculate on what, if any, impact these actions will have on wholesale electricity prices or the level of imports into the region.”

Dr. Mohammad Elahee, a business professor at Quinnipiac University, said your bill would not go up right away because utilities buy their supply in advance.

But major manufacturers, particularly defense contractors, could see immediate impacts in terms of raw supplies and sales to Mexico and Canada.

“There is no winner, only losers,” said Elahee. “Canada has other options. Maybe initially they will suffer, but they will go to Europe. They will go to China.”

Gov. Ned Lamont said Monday that he is taking a wait-and-see approach.

“Wait till tomorrow and we’ll see whether they change their mind, whether there’s some continuity here,” Lamont said. “There are a lot of thought bubbles coming up out of Washington, and I can’t respond to each and every one of them.”

Lamont is proposing a new state budget on Wednesday – a daunting task considering the uncertainty over tariffs and federal spending cuts.

“We’re in a better position than most other states,” Lamont told reporters. “We do have some reserves, even in our operating reserves right now. But I can’t hold out hope that I can make up for everything that the federal government may disappear.”

Even Trump’s fellow Republicans are wary of the tariffs.

“Generally speaking as a policy, they could negatively impact consumers,” said state Sen. Ryan Fazio (R-Greenwich), the top Republican on the General Assembly’s Energy and Technology Committee. “But hopefully, this results in better trade deals for the United States, and it can be sunset, so we can enjoy lower costs.”

Fazio said the threat of new energy taxes should be a wake-up call to state lawmakers.

“We already pay among the highest costs of electricity in the entire country,” he said. “So hopefully, as state lawmakers, we can also use the opportunity as a rallying cry to make the reforms on a state level necessary.”