The Canada-U.S. trade fight can sound like a dispute being conducted entirely in Washington and Ottawa, but the economic exposure runs through factory floors, refineries and distribution networks across the United States. American states traded roughly $632 billion in goods with Canada in 2025, and an unusually large share was concentrated in a handful of industrial economies. Illinois, Texas, Michigan, Ohio and New York alone accounted for about $267 billion. That concentration helps explain why economists are looking beyond tariff revenue to what happens when cross-border inputs become more expensive or Canadian buyers purchase fewer American products. Recent research on automobiles adds another warning: some of the American jobs exposed to Canadian auto tariffs sit well outside vehicle assembly plants, spreading the potential effects deeper into regional supply chains.
Illinois: The Biggest State-Level Trade Relationship Runs Through Energy
Illinois had the largest goods-trading relationship with Canada of any U.S. state in Texas A&M University’s 2025 analysis, with approximately $75.6 billion in two-way trade. The balance was heavily tilted toward imports: Illinois recorded a roughly $39.9-billion deficit with Canada, much of it associated with energy. The researchers calculated that $43.6 billion of U.S. oil-and-gas imports from Canada were delivered to Illinois during the year. At the same time, Canada remained an important customer for Illinois producers, with U.S. trade data placing Canadian purchases of Illinois goods at roughly $18 billion in 2025. That combination makes the state an unusually clear example of why a trade deficit does not necessarily mean goods are simply competing with local production. Canadian energy is also an input for American refining, transportation and manufacturing activity.
The physical flow of oil makes that relationship easier to understand. U.S. Energy Information Administration data show that the Midwest imported about 2.75 million barrels per day of Canadian crude oil in 2025, making Canadian supply a major part of the regional refining system. A tariff that raises the landed cost of those barrels can therefore work its way into the economics of refineries and businesses buying their products. Meanwhile, Canadian countermeasures can affect Illinois exporters moving machinery, chemicals, food and other manufactured goods north. Texas A&M consequently describes Illinois as particularly exposed on the import-cost side of the dispute. The Trump administration argues that its tariff measures can protect American production and respond to what it considers discriminatory Canadian policies. For Illinois businesses, however, the practical calculation includes both objectives and the immediate cost of replacing established suppliers or customers.
Texas: Canada Is Both a Customer and a Supplier
Texas presents a different kind of exposure because trade with Canada is much more balanced. Texas A&M calculated approximately $65.9 billion in two-way Texas-Canada goods trade in 2025, placing the state second nationally. Canada also remained one of Texas’s biggest export destinations. U.S. Trade Representative data show Texas shipped roughly $35 billion in goods to Canada during 2025, second only to Mexico among the state’s foreign markets. The connection stretches well beyond a single industry. Texas exports huge volumes of chemicals, petroleum products, electronics, machinery and transportation equipment to global markets, while its relationship with Canada includes a substantial energy component. Texas A&M identified about $7.5 billion in Texas oil-and-gas exports to Canada and approximately $5.2 billion moving in the opposite direction, illustrating a trade relationship that works both ways even inside a sector normally associated with competition.
That balance creates two potential channels through which tariffs can reach Texas companies. Duties on Canadian goods may increase the cost of inputs purchased by Texas businesses, while Canadian tariffs or weaker Canadian demand can make it harder for Texas exporters to maintain sales north of the border. This is why the state-level analysis places Texas among jurisdictions exposed on both the import and export sides rather than describing it simply as a tariff beneficiary or casualty. The scale matters because Texas is America’s largest goods-exporting state, shipping more than $448 billion worldwide in 2025. Canada represents only one portion of that enormous international network, but it remains a sizeable one. For an energy producer, chemical company or equipment manufacturer accustomed to treating the continental market as a connected commercial space, even modest border friction can alter sourcing decisions, inventories and pricing long before a factory closes or a major investment is cancelled.
Michigan: The Auto Supply Chain Makes Tariff Exposure Especially Visible
Michigan’s relationship with Canada remains one of the most integrated industrial connections on the continent. Texas A&M put the state’s two-way goods trade with Canada at approximately $61.2 billion in 2025, down from $73.6 billion in 2023. Transportation equipment dominates much of that activity. The researchers found Michigan exported about $13.6 billion in transportation equipment to Canada while importing roughly $23.4 billion in the same category. Separate U.S. trade data identify Canada as Michigan’s largest foreign customer, accounting for a substantial share of state exports. Those numbers help explain why an automobile assembled on one side of the border cannot always be treated as an entirely Canadian or American product. Engines, electronics, stampings, seats and other components can move through a North American production system before a finished vehicle reaches a dealership.
Oxford Economics recently highlighted that integration when examining additional tariffs on Canadian vehicles, trucks and parts. Its analysis estimated that Michigan employment connected to Canadian auto-sector purchasing is about 3.5 times more exposed than the U.S. average, behind only Kentucky among the states studied. Importantly, Oxford estimated that roughly two-thirds of the American jobs exposed through those Canadian automotive purchases are outside automotive manufacturing itself. Suppliers, logistics providers and other businesses can therefore feel pressure even if they never assemble a vehicle. The Trump administration maintains that tariffs are intended to strengthen domestic production and counter Canadian trade policies it views as discriminatory. Oxford’s modelling focuses on a different part of the equation: when companies on opposite sides of the border already buy from one another, reducing Canadian production or making those transactions more expensive can also reduce demand for some American-made components and services.
Ohio: Export Strength Creates Its Own Form of Risk
Ohio stands out because its exposure is more closely connected with what it sells to Canada. Texas A&M recorded approximately $33.3 billion in two-way goods trade between Ohio and Canada in 2025 and classified Ohio among the states running a trade surplus in the relationship. U.S. Trade Representative figures show Canada purchased about $18.3 billion in Ohio goods that year, representing roughly one-third of the state’s total merchandise exports. The Federal Reserve Bank of Cleveland has also documented Canada’s long-standing importance to Ohio: in 2024, Canada took 36.2% of the state’s exports and remained Ohio’s largest foreign market. Transportation equipment is particularly important to Ohio’s broader export economy, alongside chemicals, machinery and fabricated and primary metals. That industrial mix ties the state closely to Canadian manufacturers as customers as well as competitors.
For a state running a bilateral surplus, the tariff calculation differs from Illinois’s energy-heavy import exposure. Texas A&M’s researchers argue that surplus states such as Ohio are comparatively more vulnerable to Canadian countermeasures or reductions in Canadian demand. An Ohio manufacturer that already produces domestically does not necessarily benefit if its Canadian customer suddenly faces a higher cost for buying American goods. The scale of the exporting base also spreads the issue beyond household-name corporations. USTR data show nearly 15,000 companies exported goods from Ohio locations in 2024, with small and medium-sized businesses accounting for the overwhelming majority of those exporters, although not all trade with Canada. That means a prolonged dispute can ultimately become a question of purchase orders and supplier contracts for smaller firms as well as policy negotiations involving major automakers and steel producers.
New York: Metals, Manufacturing and Border Commerce Add Another Layer
New York rounds out Texas A&M’s five largest state-level Canada trading relationships, with about $31 billion in two-way goods trade in 2025 under the researchers’ methodology. The relationship had been considerably larger immediately before the latest contraction. New York State Comptroller data show that in 2024 the state exported approximately $20.3 billion in goods to Canada and imported about $20.5 billion, producing more than $40 billion in bilateral goods trade. The comptroller identifies Canada as one of New York’s most important commercial partners, while Texas A&M points to the state’s exposure to Canadian industrial materials. Of the $29.6 billion in primary metals the United States imported from Canada in 2025, approximately $6.4 billion was delivered to New York, giving tariffs on steel, aluminum and related products direct relevance to businesses using those materials.
New York also illustrates how quickly trade patterns can change when companies face weaker demand, new duties and uncertainty over future rules. The state comptroller reported that New York exports to Canada declined in 2025 and that exports fell across more than two-thirds of the product categories it examined. Its assessment argues that tariff uncertainty can affect business planning while higher import costs can contribute to price pressures. Those findings do not establish that every lost export or price increase was caused by tariffs; economic conditions, currencies and individual industries also matter. They do reinforce the broader point made by the Texas A&M analysis: measuring exposure requires looking at what states actually import and export, not simply the national trade balance. From Buffalo-area manufacturers to companies buying Canadian metals, businesses near the border can experience the consequences of a bilateral dispute in ways that national totals tend to hide.
