The United States, often regarded as a single economic powerhouse, is actually a tapestry of 50-plus individual economies, each characterized by unique trade relationships. A significant portion of states rely heavily on imports from neighboring Canada and distant China. This complex economic interdependence highlights the potential impact of international trade policies on state economies.
"We're the United States of America, but we're also 50-plus individual economies, and like snowflakes, none are exactly alike. That's certainly true when it comes to trade," – Matt Schulz, chief credit analyst for LendingTree
Several states are particularly reliant on Canada for their imports. Montana, for example, sources a staggering 92% of its goods from Canada. Similarly, Maine imports 69.4%, Vermont 68%, and North Dakota 64% of their goods from Canada. Wyoming (55%), Oklahoma (51%), West Virginia (44%), South Dakota (41%), Minnesota (38%), and Colorado (31%) also feature prominently in this list, evidencing strong trade ties with their northern neighbor.
"The truth is that there's risk for any state in having too much of its trade involve a single product or a single trade partner," – Matt Schulz, chief credit analyst for LendingTree
This over-reliance on a single trading partner or product introduces significant economic risks. If Canada were to impose retaliatory tariffs or if diplomatic ties were to sour, these states could face considerable economic disruption.
In contrast, certain states have established substantial import relations with China. California imports 27% of its goods from China, while New Mexico follows closely at 26.4%. Nevada and Illinois import 22% and 20.3% of their goods from China, respectively.
"Mexico, Canada, and China are our top trading partners, so U.S. imports from them aren't confined to a handful of major categories," – William George, director of research for ImportGenius
The diversity of imported goods from these countries underscores their integral role in the U.S. economy.
"Goods sourced from these countries can be found on any store shelf and used in any imaginable industry. We are talking oil, electronics, and auto goods [which] dominate U.S. imports by sheer dollar value," – William George, director of research for ImportGenius
The automotive industry in Michigan exemplifies how state economies benefit from imports. Michigan's auto and auto parts imports underpin an industry that contributes over $300 billion to the state's economy annually.
"For example, Michigan's auto and auto parts imports support an automotive and mobility industry which contributes over $300 billion to the state's economy yearly," – George
Furthermore, Tesla’s operations in California and Texas illustrate the strategic importance of Chinese imports. Both states import significant volumes of lithium-ion batteries from China. Since 2023, Tesla has imported over 12,000 twenty-foot equivalent containers (TEUs) of batteries into these two states alone.
"Tesla has a strong presence in the two states importing the most lithium-ion batteries from China: California and Texas," – George
"Since 2023, Tesla has brought in over 12,000 twenty-foot equivalent containers (TEUs) of the batteries between the two states. That's at least 100 million lithium batteries for Texas and California alone," – George
The potential for economic disruption due to retaliatory tariffs or policy changes remains a pressing concern for states heavily reliant on foreign imports.
"Any retaliatory tariffs by those countries or focused on those industries could have a very significant effect on the state's economy," – Matt Schulz, chief credit analyst for LendingTree