With the White House’s self-imposed deadlines to reach trade deals with dozens of countries just a little over a week away, states are bracing themselves for the potential impact of higher tariffs.
That impact is likely to vary widely from state to state, according to Dan Anthony, president of Trade Partnership Worldwide, a Washington, D.C.-based economic research firm.
“Something affecting one country or one product might really hurt the companies in one state and the state next door would be unaffected,” he said.
The larger and more diverse a state economy is, the more likely it faces exposure in a trade war. But even some smaller states could see outsized impacts.
“You look at a state like Kentucky, its goods trade — exports and imports — are about 50% of its GDP. It’s the highest in the country. Contrast that with a state like Virginia, where it’s less than 10%,” he said. “Texas is up there. Indiana is up there. Michigan is up there, in terms of goods trade really being a big piece of the economy.”
No state faces greater risk than California, which did more than $720 billion in international goods trade last year, according to TPW’s data. While that comprised a relatively modest 21% of the state’s GDP, nearly one-quarter of that trade was with China.
At the Port of Oakland, California, the ninth-largest container port in the country and a critical export hub for agricultural products from California and the Midwest, maritime director Bryan Brandes said the port and its customers have been dealing with months of ups and downs.
“Every major importer, exporter, ocean carrier, terminal operator, they would just like some type of certainty,” he said. “Predictability provides for a better service. It’s easier for people to plan.”
The situation remains highly uncertain, with the White House saying on Thursday the July deadlines may not stick, and the U.S. and China confirming progress on some aspects of a trade deal on Friday.
Brandes said volumes at the port are slightly higher overall compared to a year ago, but that does not tell the full story.
“Exports have increased over this last couple of months,” he said. “The importers are struggling with big decisions. Lower volume impacts everybody differently. Bigger companies can weather the storm. Who really suffers are the small businesses in the area.”
The ripple effect in the state economy could be profound, Anthony said.
“If truck drivers don’t have cargo to haul, they’re not going to be spending money at restaurants. They’re not going to be doing other things in their local communities that support other jobs that most people think are wholly unrelated to trade.”
Shipping containers are seen at the port of Oakland, as trade tensions continued over U.S. tariffs with China, in Oakland, California, on May 12, 2025.
Carlos Barria | Reuters
In Oakland alone, Brandes said, 98,000 jobs are directly or indirectly related to the port, as well as $175 billion in economic activity. “So, it is a significant deal to Northern California as well as the state of California,” he said.
Because international trade is so important to so many states, CNBC is factoring the potential risks from tariffs into our annual state competitiveness rankings, America’s Top States for Business.
Using data compiled for CNBC by Trade Partnership Worldwide, the study scores states on factors including international trade as a percentage of state gross domestic product [GDP], the percentage of that exposure tied to China, as well as the overall impact under a variety of potential tariff scenarios.
“You can look at different states and say, are they more exposed to the national security tariffs, or are they more exposed to those reciprocal tariffs?” Anthony said. “Wherever things net out, it gives you a sense of where those risks lie.”
International companies could be a boon for some states
But where there is risk, there are also opportunities, according to Tom Stringer, a principal and leader of the site selection and incentives practice at Grassi Advisors in New York, who said he is seeing increasing activity from international companies seeking to set up shop in the U.S. to avoid the tariffs — which is exactly what the Trump administration is hoping for.
“There’s no question some companies are taking it seriously,” he said. “Businesses are craving certainty, and certainty here is to have the additional capacity to serve markets, and that is certainly taking place here in the U.S.”
Among Stringer’s clients is Windrose Technology, a Chinese company — officially headquartered in Belgium — that is manufacturing electric big rig trucks that the company says can go 400 miles, fully loaded, on a single charge.
Founder and CEO Wen Han, who was raised in the U.S. and educated at Stanford, said the company was always planning to build a U.S. plant. Now, those plans are moving full speed ahead, taking the long view of U.S.-China relations.
“There are periods in which tensions are higher, such as maybe today, but my intention is to really look past cycles and sort of focus on what everybody really wants,” he said.
Han has narrowed the search to three states: Georgia, a transportation hub that has embraced electric vehicle manufacturing; Arizona, a leader in workforce development; and California, with a large and well-educated talent pool.
As of Thursday, he said he was still negotiating details with all three states — the California site is in Sacramento, Arizona’s is in Phoenix, and Georgia’s is in Savannah. But he said that not everything will be about the numbers.
“It really comes down to the right match. It’s a bit like a dating process. It’s like falling in love,” he said.
Because the U.S. plant will initially assemble trucks from parts made in China, it likely will not escape the tariffs. But Han said his products will still be cost-competitive with domestic vehicles. Tariffs or not, he said the U.S. market is critical.
“The United States has always been a fantastic place to start a company and build a new product,” he said.
But right now, it is a lot less predictable than it once was.
