{"id":77941,"date":"2026-09-02T21:24:01","date_gmt":"2026-09-02T21:24:01","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2026\/09\/02\/which-states-stand-to-suffer-most-in-escalated-u-s-canada-trade-war\/"},"modified":"2026-09-02T21:24:01","modified_gmt":"2026-09-02T21:24:01","slug":"which-states-stand-to-suffer-most-in-escalated-u-s-canada-trade-war","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2026\/09\/02\/which-states-stand-to-suffer-most-in-escalated-u-s-canada-trade-war\/","title":{"rendered":"Which states stand to suffer most in escalated U.S.-Canada trade war?"},"content":{"rendered":"<p> \n<br \/><iframe loading=\"lazy\" title=\"U.S. economy is losing momentum: Rosenberg\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/wjJda5wywOI?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p> Ottawa says new counter-tariffs on American goods are primarily designed to protect Canadian companies\u2019 domestic market share. But with November\u2019s U.S. midterm elections looming, there\u2019s no doubt the levies will have an impact both economically and politically, particularly in battleground states (think Michigan, Ohio and Iowa). <\/p>\n<p> \u201cI think that\u2019s very intentional,\u201d said Inu Manak, a senior fellow at the Peterson Institute for International Economics in Washington, D.C. \u201cIt\u2019s to draw attention to this issue, make politicians in the United States talk about it, because I think there has been some frustration among a lot of U.S. trading partners that there\u2019s silence from Congress on a lot of these issues.\u201d <\/p>\n<p> With Canada\u2019s $27.6 billion in counter-tariffs set to take effect in less than a week, here\u2019s a look at which industries and states could feel the most economic pain. <\/p>\n<h2>Steel and aluminum<\/h2>\n<p> On Sept. 8, Canadian counter-tariffs on certain steel , aluminum and iron products from the U.S. will increase from the current rate of 25 per cent to 50 per cent. The new levies would apply to hundreds of derivative products used in construction, manufacturing, vehicles, machinery, equipment and consumer products. <\/p>\n<p> In general, states that have a lot of automotive and industrial manufacturing will be hurt the most because those sectors are highly integrated across Canada and the U.S., Manak said. <\/p>\n<p> \u201cLooking at Ohio, Michigan, Indiana, and Pennsylvania, these are areas where you have iron and steel production,\u201d she said. <\/p>\n<p> Those four states were the top U.S. exporters of iron, steel and ferroalloy to Canada in 2025, with a combined US$2.6 billion \u2014 about half of all steel exported to Canada. <\/p>\n<h2>Motor vehicles and related products<\/h2>\n<p> Canada is maintaining its existing 25 per cent counter-tariffs on American-made vehicles that aren\u2019t compliant under the Canada\u2013United States\u2013Mexico Agreement ( CUSMA ), first imposed in April 2025. <\/p>\n<p> But starting Sept. 8, new counter-tariffs of 25 per cent to 50 per cent could apply to certain U.S. motorcycles, trailers, semi-trailers and other vehicle-related products. <\/p>\n<p> States like Michigan and Ohio are particularly vulnerable to auto-related tariffs because their manufacturing bases are highly integrated with Canada\u2019s. Last year, 38 per cent of all exports from Michigan and 32 per cent from Ohio went to Canada, according to data from the U.S. Department of Commerce\u2019s International Trade Administration (ITA). Motor vehicles and parts are both states\u2019 top northbound exports. <\/p>\n<p> There\u2019s a lot at stake for Michigan, a border state with deep trade and tourism ties to Canada, which will elect a new governor and senator in November. <\/p>\n<p> \u201cMichigan would probably be the single state hit hardest because the auto industry is so important to them economically and psychologically,\u201d said Ed Gresser, vice president at the U.S.-based Progressive Policy Institute think tank. \u201cAnd Michigan is probably the state most deeply integrated with Canada.\u201d <\/p>\n<p> Major automakers Ford Motor Co., General Motors Co., Honda Motor Co. Ltd. and Toyota Motor Corp. also have plants in other states, including Indiana, Missouri, Kentucky and Alabama. All four of those states count motor vehicles as their top export to Canada. <\/p>\n<h2>Dairy products<\/h2>\n<p> Canada\u2019s proposed levies on American milk, cream, cheese, curd and whey would apply to products both within and outside of the tariff-rate quotas imposed under Canada\u2019s dairy supply management system. <\/p>\n<p> Michigan and Wisconsin send the most dairy to Canada of any U.S. states. Michigan exported US$540 million in dairy products last year, with 39 per cent of it going to Canada, according to ITA data. <\/p>\n<p> In America\u2019s number one cheese-producing state, trade is little more diverse. Wisconsin exported US$761-million worth of dairy last year, 21 per cent of which went to Canada. <\/p>\n<p> While California is America\u2019s number three exporter of dairy to Canada, those products are but a small slice of its overall trade. Of the US$2.6 billion in dairy exported by the golden state last year, only five per cent went to Canada. <\/p>\n<p> Manak said Canada\u2019s counter-tariffs will have a bigger impact on smaller states like Vermont, which sends 80 per cent of its US$78 million in annual dairy exports north. <\/p>\n<p> \u201cIt\u2019s the concentration of dependency that matters more than value,\u201d she said. \u201cIn a lot of these border (states), they have whole communities that are centered around trade with Canada.\u201d <\/p>\n<h2>Appliances and other consumer products<\/h2>\n<p> Canada\u2019s counter-tariffs will cover a large swath of U.S. consumer appliances and products such as refrigerators, freezers, dishwashers, air conditioners, dryers, stoves, ovens and barbecues. <\/p>\n<p> Ohio, whose appliance manufacturing base is anchored by Whirlpool Corp., exports 42 per cent of its household-appliance exports to Canada. <\/p>\n<p> GE Appliances has its main appliance-manufacturing complex in Kentucky, which exports 52 per cent of its appliances to Canada. <\/p>\n<p> Tennessee is a major manufacturing hub for home appliance brands such as LG Electronics Inc., Electrolux AB, GE Appliances and Whirlpool. Seventy-five per cent of Tennessee\u2019s appliance exports go to Canada. <\/p>\n<p> For states that are dependent on trade with Canada across different product categories, Manak said there are downstream effects on every part of the supply chain \u2014 processing, packing, logistics and deliveries \u2014 along with all the jobs those roles create. <\/p>\n<p> \u201cWhen you target a specific product with a tariff, you\u2019re not just hitting that product, you\u2019re actually hitting the community in which it was made,\u201d she said. <\/p>\n<h2>Industrial equipment and heavy machinery<\/h2>\n<p> Tariff rates of 15 per cent, 25 per cent or 50 per cent will be imposed on agricultural and construction machinery including mowers, forklifts, tower cranes, chair lifts, harvesting machinery and replacement parts. <\/p>\n<p> \u201cThis is happening right before harvest time,\u201d said Manak. \u201cThis is another important thing to keep in mind \u2014 the timing, which I think is not lost on the farm states.\u201d <\/p>\n<p> Texas and Illinois are the top exporters of agricultural and construction machinery to Canada, with each sending more than US$2 billion worth of goods north in 2025. <\/p>\n<p> Illinois-based Deere &amp; Co., which makes agricultural machinery and heavy construction equipment under the John Deere brand, has more than a dozen manufacturing facilities across states including Illinois, Iowa, Georgia, Tennessee and Wisconsin. <\/p>\n<p> Gresser said the impact of counter-tariffs could be more profound on smaller states like Iowa, which exports nearly US$2.5 billion in farm and construction equipment every year and sends 38 per cent of that to Canada. <\/p>\n<p> \u201cSmaller states are often more specialized,\u201d Gresser said. \u201cWhen something goes wrong for a particular company in a small state, it has real emotional reverberations \u2026 if it\u2019s in California or Texas, it may be more like a particular city or a particular region (that is affected).\u201d <\/p>\n<ul class=\"related_links\">\n<li>Linda Hasenfratz: Keep calm and trade on<\/li>\n<li>Canada-U.S. free trade was a model for the world. Can anything save it now?<\/li>\n<li>Diane Francis: Why we should tax energy exports to the U.S.<\/li>\n<\/ul>\n<p> <em>\u2022 Email: jswitzer@postmedia.com<\/em> <\/p>\n\n<br \/>Which states stand to suffer most in escalated U.S.-Canada trade war?<\/a><br \/>\n<br \/>2026-09-02 21:24:01<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ottawa says new counter-tariffs on American goods are primarily designed to protect Canadian companies\u2019 domestic market share. But with November\u2019s U.S. midterm elections looming, there\u2019s no doubt the levies will&#8230;<\/p>\n","protected":false},"author":2,"featured_media":77942,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-77941","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/77941","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=77941"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/77941\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/77942"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=77941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=77941"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=77941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}