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If the U.S. gets into a trade war, Wyoming would be just fine. Michigan … maybe not so much.
The economies of U.S. states vary greatly, with international trade making up a huge chunk of state gross domestic product in Michigan — nearly 39% — but just 1.5% in Washington, D.C.
Investors have been spooked by potential trade wars this month, after the Donald Trump administration announced new trade restraints against China. This comes in the wake of President Trump imposing tariffs on aluminum and steel imports earlier this month.
The states that depend on foreign trade for a large share of their state’s economy and jobs, especially those that rely on the automotive, aerospace or energy industries, could face challenges if those trade wars happen, wrote Mark J. Perry, a researcher at the conservative-leaning think tank American Enterprise Institute (AEI) and a professor at the University of Michigan’s Flint campus.
AEI analyzed data from the U.S. Census Bureau and Bureau of Economic Analysis to find which states have international trade activities (both imports and exports) making up the largest portions of their economies.
Courtesy of HowMuch.net
Many of the states most reliant on foreign trade, including Louisiana, Kentucky, Tennessee, South Carolina and Texas, ultimately voted for Trump in the 2016 presidential election.
Michigan came out on top of AEI’s ranking, largely because of its auto-related exports. Major auto makers including Ford F, +0.46% are based in the state. Mexico and Canada are Michigan’s top import and export trading partners, AEI said. Trump said earlier this month that those countries could avoid steel and aluminum tariffs if a “new and fair” NAFTA agreement is signed. Fiat Chrysler FCAU, -1.96% announced in January it would shift production of one of its most profitable trucks, to Michigan, from Mexico.
Louisiana also heavily relies on international trade, coming in just behind Michigan in AEI’s ranking. Louisiana’s location on the Gulf Coast allows the state to import large quantities of crude oil, and its top import trading partners are Saudi Arabia, Venezuela, Russia, Iraq, Algeria and Canada.
Kentucky is third, having produced more than 1.3 million vehicles in 2017. Ford, General GM, +2.12% and Toyota TM, +1.04% have all produced large quantities of cars in Kentucky.
Here is a sample of AEI’s ranking, which the website HowMuch.net created a graphic to display.
| States, ranked by trade share | GDP in 2017 (billions) | Percentage of GDP based on trade |
| Michigan | $514.5 | 38.9% |
| Louisiana | $243.3 | 38.7% |
| Kentucky | $204.4 | 38.1% |
| Tennessee | $344.7 | 32.6% |
| South Carolina | $218.9 | 31.9% |
| Texas | $1,692.0 | 31.2% |
| Indiana | $359.5 | 25.7% |
| Washington | $503.1 | 25.3% |
| New Jersey | $589.3 | 25.0% |
| Illinois | $818.2 | 24.6% |