Research recently released by the Canadian Chamber of Commerce’s Business Data Lab (BDL) evaluates which US cities are most export-dependent on Canada and thus most vulnerable to the consequences of reduced Canadian demand due to tariffs.
In a news release of the Canadian Chamber of Commerce, its principal economist Andrew DiCapua stressed that the American cities most dependent on exports to Canada are exposed to “significant risk in this trade war.”
The BDL’s research looks into the top 41 US metropolitan areas based on their Canadian dependence measure, namely the city’s share of exports to Canada and its export value as a share of their gross domestic product (GDP), compared with the US average, the news release said. Even cities with lower Canada dependence measures are seeing the trade war’s fallout, the news release noted.
The news release explained that less exports may decrease the local economic activity and result in job losses in the US. The news release also noted the negative impacts on Canadian consumer and business confidence and Canadian sentiment toward buying US products.
The BDL’s research found that San Antonio (Texas), Detroit (Michigan), and Kansas City (Missouri) were the cities with the highest Canadian dependence scores.
“San Antonio, Detroit, and Kansas City being the top three most vulnerable underscores that trade interdependence with Canada touches every corner of the US, affecting millions of local jobs and long-term relationships built over decades,” DiCapua said in the news release.
According to the news release, the BDL’s research also revealed that:
- Houston (Texas), Chicago (Illinois), and Detroit (Michigan) are the biggest exporters to Canada in terms of value, with Houston exporting $18 billion last year
- Laredo (Texas) and Detroit (Michigan) – dubbed key trade gateways – have the highest export value as a share of their GDP
- Two-thirds of the 41 US cities with the highest Canadian dependence scores are in states that voted for US President Donald Trump in last year’s presidential election
Trade war fallout
“Americans facing challenges around affordability, durable businesses and creating well-paying jobs have counted on Canada for generations,” the news release said. “This trade war has severely cracked the greatest partnership the world has ever seen.”
The trade war will jeopardize trade and supply chains mutually beneficial to the economies of both countries, with communities across the US feeling these impacts, the news release said. Among the goods imported to the US from Canada, over 60 percent are intermediate goods such as lumber, oil, steel, nuts, and bolts, which boost the US economy and its export capacity, the news release added.
“Policymakers weighing next moves would do well to remember the livelihoods that hang in the balance and that our geography makes us stronger, together,” DiCapua said in the news release.