Ohio Gov. John Kasich on Wednesday warned that new steel and aluminum tariffs will raise costs for a multibillion-dollar plant at the heart of Appalachia's ambitions to develop a petrochemicals hub.

Kasich, who ran against President Donald Trump in the 2016 GOP primary and is widely seen as a potential challenger in 2020, said the United States should fight unfair trade practices. But he criticized Trump's process and rationale for imposing the tariffs.

"I just think that protectionism doesn't work," Kasich told CNBC's "Squawk on the Street" on Monday. "It costs the consumers money. It means that we don't have the kind of innovation we want."

Kasich's home state of Ohio, along with Pennsylvania and West Virginia, is trying to develop the nation's second petrochemicals hub. A boom in natural gas drilling in the region has created a cheap and abundant supply of the byproducts used in the industry.