Politics

Trump states could feel the most pain in the widening trade battle. Here's a look at the impact

Key Points
  • As the U.S. and its trading partners continue to ratchet up trade tensions, some states can expect to feel a much bigger economic impact than others, according to data compiled by the nation’s largest business lobbying group.
  • The U.S. Chamber of Commerce on Monday launched a campaign attacking President Donald Trump's trade policies with a state-by-state breakdown of the impact of rising tariffs on hundreds of specific products recently targeted by China, Canada, Mexico and the European Union.
  • The data provide a closer look at how the economic fallout from an escalating trade war would be felt unevenly across the country.
A farmer drives a combine while harvesting soybeans.
Ty Wright | Bloomberg | Getty Images

As the U.S. and its trading partners continue to ratchet up trade tensions, some states – particularly ones President Donald Trump won in 2016 – can expect to feel a much bigger economic impact than others, according to data compiled by the nation’s largest business lobbying group.

The U.S. Chamber of Commerce on Monday launched a campaign attacking Trump's trade policies with a state-by-state breakdown of the impact of rising tariffs on hundreds of specific products recently targeted by China, Canada, Mexico and the European Union. The data provide a closer look at how the economic fallout from an escalating trade war would be felt unevenly across the country.

Since the Trump administration’s decision earlier this year to raise tariffs on steel and aluminum imports, major U.S. trading partners have retaliated by targeting a growing list of U.S. export products.

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China is expected to impose a new 25 percent tax on soybeans in July. Mexico is adding duties to pork imports. The EU has targeted $3.2 billion in American goods exported to the 28-member bloc, including bourbon and Harley-Davidson motorcycles.

Canada struck back with punitive measures on $12.6 billion worth of American goods, which became effective over the weekend.

On Monday, the European Union countered a recent White House threat to impose tariffs on European auto imports, raising the prospect of even higher prices for U.S. consumers and lost sales for American exporters. General Motors has warned that any U.S. tariffs on imported vehicles could also cost U.S jobs.

For the states, the biggest impact of a trade war in dollar terms would be felt by the major exporters like Texas and California, according to the Chamber of Commerce data. Some $3.9 billion worth of exports from Texas could be targeted by retaliatory tariffs, including $1.6 billion from Mexico and $1.4 billion from China. Texas sends $321 million in meat exports to Mexico each year that could be affected. It exports $494 million in the grain sorghum to China.

Smaller states, where exports make up a bigger share of overall gross state product, could be hit even harder. Louisiana, for example, exports nearly $6 billion in soybeans, one of the commodities high on China’s list of tariff targets.

Several of the states Trump carried in the 2016 election would be hit hardest by tariff retaliations from major U.S. trade partners. In Tennessee, where Trump won 61 percent of the vote, some $1.4 billion in exports could be at risk. Tennessee sends $202 million worth of auto exports to China that could be hit by tariffs, according to the Chamber’s data. It also sends $466 million worth of whiskey exports to Europe.

The Chamber, with some 3 million members, has worked closely with Republican presidents and had praised Trump for signing steep corporate tax cuts in December. But mounting trade tensions have opened a rift with the president. The group is expected to spend millions of dollars on the midterm elections this year in an effort to help elect candidates who back free trade, immigration and reduced taxes.

European Union warned Monday that a U.S. threat to slap import tariffs on cars and car parts would likely bring further retaliation from its trading partners on $294 billion of American made cars and auto parts.

That could hurt South Carolina, where $3 billion of the state's exports could be subject to retaliatory tariffs. South Carolina sends $1.9 billion worth of autos to China, according to the Chamber’s data.

Trump’s tough stance on trade with China appears to be having little impact on U.S. imports of goods from the world’s second largest economy, as consumer spending by American households remains strong amid historically low levels of unemployment. China’s customs agency said Monday that its exports to the U.S. were up 5.4 percent in the first half of this year and rose 3.8 percent in June.

WATCH: Trump responds to retaliatory tariffs

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Awaiting Trump response to retaliatory tariffs

A new report from Oxford Economics warned Monday that tariff threats, if realized, would extend high tariffs to over 4 percent of world imports – a more than tenfold rise versus the 0.3 percent of imports hit by the new tariffs imposed so far.

"The threat to world growth is significant," the report said. "In a scenario of escalating tariffs, our modeling suggests world GDP could be cut by up to 0.4 percentage points in 2019."

Reuters contributed to this report.