How Retaliation Against the Trump Administration’s Trade War Makes Each State Vulnerable

This column contains a correction.

The Trump administration’s unilateral trade wars have provoked unprecedented retaliatory actions by foreign governments and foreign consumers. In addition to raising prices for Americans, the Trump administration’s trade war stands to harm U.S. industries in every state. New Center for American Progress analysis demonstrates the potential impacts of retaliatory measures on key export industries—including motor vehicles, aerospace, pharmaceuticals, and energy—in each state.

Several of the United States’ top trading partners have announced retaliatory measures to the Trump administration’s tariffs:

• China’s retaliation continues to escalate as it has hiked average tariff rates up to 125 percent, as of this column’s publication, and is now withholding key imports such as rare earth minerals used to manufacture semiconductors, wind turbines, fighter jets, and LED lights, among other goods.
• Canada has imposed 25 percent tariffs on autos, steel, and aluminum, as well as other tariffs on a range of imported consumer products of U.S. origin.
• The European Union announced $23 billion of retaliatory measures in response to the Trump administration’s so-called “reciprocal” 20 percent tariffs on the EU—though these measures were paused for 90 days to pursue negotiations.

U.S. businesses could disproportionately bear the costs of the Trump administration’s unprovoked actions. Overall, exports are expected to account for nearly 11 percent of gross domestic product (GDP) in 2025, highlighting that they support a substantial share of U.S. economic activity and jobs.** Retaliatory tariffs make it harder for many U.S. businesses to compete in global markets, as the price of U.S.-made goods will increase relative to products made locally or imported from elsewhere. For U.S. businesses that rely on imported parts and materials to produce in the United States, the negative impact on exports will be amplified by drastically higher operating costs as a result of the Trump administration’s existing tariffs.

And tariffs are not the only form of retaliatory action that could harm American businesses and consumers. For example, the Chinese government recently announced that its domestic airlines would no longer import Boeing airplanes or American-made aircraft parts—an action that is likely to have a significant impact in states such as Washington, Kentucky, Texas, and Georgia.

Figure 1 below shows the potential impacts of retaliatory measures on key export industries across every state. For each state, it presents the top five industries by U.S. dollar value and share of exports to China, Canada, and the European Union, respectively, alongside the most recent total employment numbers for each industry—using 2024 data from the U.S. Census Bureau’s “State Exports by NAICS Commodities” and “Quarterly Workforce Indicators.”*** For example, in Georgia, the top five industries by export volume are worth nearly $10 billion combined and include aerospace products, pulp and paper products, computer equipment, medical equipment, and agricultural and construction machinery, with nearly 50,000 people employed by those industries.

CAP estimates that at least 2.6 million people are employed nationwide in industries that are particularly at risk from retaliatory actions taken by China, Canada, and the European Union, with the largest risk to workers in California, Texas, Michigan, and Ohio. “At-risk” jobs for the purposes of this analysis are defined as all employment in the top five industries by export value in a given state, including employment in both domestic and export-oriented production. Earlier analysis from The Washington Post found that more than 5 million people are employed in industries subject to retaliatory action by China and Canada. This number could rise to nearly 8 million people with retaliatory action from the European Union, according to The New York Times. Moreover, incorporating all tariff announcements as of April 15, the Budget Lab at Yale estimates that the combined impact of the Trump administration’s tariffs and foreign retaliatory actions will result in payroll employment that is 770,000 lower by the end of 2025. While these are national statistics, job losses can create harmful consequences for businesses and families within local communities across the country.

Every state is likely to be affected by retaliatory tariffs, and some will face disproportionate harm. For example, Texas, California, New York, Illinois, Indiana, Louisiana, and Michigan all have total export values of more than $30 billion annually to the Chinese, Canadian, and EU markets and are therefore particularly vulnerable to retaliatory tariffs. Other states, meanwhile, are vulnerable to retaliatory tariffs due to a high concentration of exports in a small number of industries. For example, Alaska, Alabama, Louisiana, New Mexico, North Dakota, and the District of Columbia each have more than 75 percent of their exports to these markets concentrated in their top five respective industries. Finally, some states are more exposed to certain export destinations. For example, Michigan, Ohio, and Illinois are more vulnerable to retaliatory tariffs from Canada, whereas California, Louisiana, and Indiana are more vulnerable to EU tariffs.

Critically, Figure 1 highlights that many of the industries at risk are those that the Trump administration has purported to help with its tariff policy, including several manufacturing sectors. CAP finds that key manufacturing industries, including motor vehicles, aerospace, and pharmaceuticals, are particularly vulnerable to retaliatory tariffs.

Conclusion

The Trump administration’s reckless trade war and the retaliatory measures that its actions have provoked will cause significant damage to the U.S. economy. In the end, American exporters will be hit particularly hard and disproportionately pay the price for this trade war.

The authors thank Emily Gee, Lily Roberts, Jerry Parshall, Madeline Shepherd, and Sarah Nadeau for their thoughtful review, alongside Steve Bonitatibus, Bill Rapp, and Anh Nguyen for their visualization and editorial work on this product.

* Authors’ note: There are also a range of product-specific exemptions that apply to these tariffs, including for Canadian lumber; energy products, with a 10 percent tariff that applies for Canada; semiconductors; and some electronics.

** Authors’ note: The Congressional Budget Office’s “The Budget and Economic Outlook: 2025 to 2035” published in January 2025 contains forecast total exports for 2025 estimated at nearly $3.2 trillion dollars, equivalent to nearly 11 percent of GDP.

*** Authors’ note: Employment figures include workers in both domestic and export-oriented production, due to the analytical challenge of isolating specific export-oriented production or firms in available employment data. Industry-specific employment data contain missing or undercounted data for some industries at the four-digit North American Industry Classification System (NAICS) code level, based on the Quarterly Workforce Indicators source data.