Which US communities are most affected by Chinese, EU, and NAFTA retaliatory tariffs?



Joseph Parilla and Max Bouchet | The Brookings Institute

Trade continues to dominate the political and economic headlines, with President Trump announcing a new round of tariffs on $200 billion worth of Chinese goods. This latest comes on the heels of a summer that during which the president vacillated between threats of additional tariffs—on auto imports and China—and friendly proclamations with the European Union to work towards “zero tariffs.”

The United States’ three largest trading partners—China, the European Union (EU), and NAFTA (Canada and Mexico)—have responded in-kind. These three trading partners have implemented tariffs on over $120 billion of U.S. exports.

Figure 1 - Share of US exports targeted by retaliatory tariffs by NAICS 4 categories, 2017

This short analysis reviews the exposure local communities have to these trade policy changes. It draws on the Export Monitor, a unique dataset developed as part of the Global Cities Initiative, to estimate which local and regional economies rely the most on export industries targeted by retaliatory tariffs. Of course, the U.S.-imposed tariffs on imports also affect cities, regions, and states—as well as the firms, workers, and consumers within them.


China, the EU, and the NAFTA countries have now implemented tariffs on about $121 billion worth of U.S. exports. While that number has grown rapidly over the past several months, it still only represents about 6.1 percent of the $2 trillion in total U.S. goods and services exports in 2017. Our analysis indicates China’s retaliatory stance is strongest, accounting for $101.4 billion of the U.S. exports implicated by tariffs. We also estimate $12.8 billion of U.S. exports under Canadian tariffs, $3.5 billion under Mexican tariffs, and $3.3 billion under EU tariffs.

Share of US exports under retaliatory tariffs and share by trade partner (US$ bil), 2017



To extend the analysis we conducted in April on the impact of Chinese tariffs, we converted the products on the tariff lists announced by China, the EU, Canada, and Mexico to four-digit NAICS industry definitions. We then examined the share of overall U.S. exports in tariff-affected commodities among each four-digit industry going to each of these markets. For instance, both China and the EU tariff lists target motor vehicles, so we estimated the share of total U.S. motor vehicles exports that go to China and the EU using national trade data. We then assigned that national ratio to each U.S. county exporting motor vehicles. This methodology estimates the local impact of the tariff changes that, while admittedly blunt, provide the best first-order guess with the available data at hand.

Based on this method, we estimate that the tariffs may affect about 294,000 direct export jobs. But those jobs support an additional 354,000 jobs, which means the tariffs implicate a little less than 650,000 jobs overall. These jobs estimates seek to isolate those jobs that depend on exports to the countries that have introduced retaliatory tariffs; they are not estimates of anticipated job losses.

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