Key facts
- New U.S. tariffs on Canadian goods and Canada's retaliatory measures could harm consumers and businesses in states bordering the U.S.
- Several of these states are hosting key midterm election races.
- The tariffs apply to about 6% of U.S. imports into Canada and 5% of Canadian imports into the U.S.
- Canada is the top foreign buyer of exports from 26 U.S. states and the top import source for 22 states.
- Maine and Michigan are among the top 10 states for combined annual import-export business with Canada.
- Ohio ranks 15th in combined annual import-export business with Canada.
New tariffs imposed by the U.S. on Canadian goods, and matching retaliatory measures from Canada, risk disproportionately harming consumers and businesses in states bordering the northern neighbor. Many of these states are hosting key races in the upcoming midterm elections, potentially impacting President Donald Trump's electoral prospects.
Analysts told ABC News that the fresh levies on $20 billion in Canadian goods are expected to increase prices for imports such as orchids and hockey sticks, which are largely sold in states along the border. The retaliatory tariffs, which took effect Tuesday, could also reduce sales for U.S. businesses that export to Canada. A decline in cross-border tourism may also hurt companies located near the Canadian border.
Canada is the top foreign buyer of exports from 26 U.S. states and the top source of imports for 22 states, according to an analysis of U.S. Census Bureau data by the Royal Bank of Canada. Maine and Michigan are among the top 10 states for combined annual import-export business with Canada, while Ohio ranks 15th. Montana, North Dakota, and Minnesota also rank high.
While the current tariffs affect a small portion of trade between the two countries—6% of U.S. imports into Canada and 5% of Canadian imports into the U.S.—their effects are expected to be more pronounced in border states due to the significant share of trade they conduct with Canada. "Someone in Oklahoma doesn’t feel this as much as someone in Dearborn, Michigan," said Jason Miller, a professor of supply chain management at Michigan State University, emphasizing the geographical nature of the impact.
The U.S. auto industry, which has a highly integrated supply chain with Canada and Mexico, has already faced strain from previous 25% tariffs on imported cars and auto parts. Escalation of the trade dispute could lead to further fallout for car companies, according to Glenn Stevens Jr., an executive director at MichAuto.