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Who Should Be Most Relieved By NAFTA Continuation?

Elizabeth Balboa

After a harrowing week of questioning the endurance of NAFTA, it seems that the trade deal’s greatest stakeholders can sigh in relief. President Donald Trump confirmed Thursday his willingness to continue work with Mexico and Canada to renegotiate the terms of the agreement.

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For states like Michigan, the president’s strategy is good news.

“Its biggest import is ‘Car Parts’ and its biggest import partner is Mexico, so it’s likely that many of those imported car parts are from Mexico. Michigan’s largest export category is ‘Transportation Equipment’ and its largest export partner is Canada,” Mark Perry, scholar at the American Enterprise Institute, said. “So, it’s probably the case, partly because of NAFTA, that Michigan’s automotive sector benefits by importing car parts from Mexico, and then exporting finished vehicles to Canada.”

And it’s not the only NAFTA-exposed state celebrating the trade deal’s survival.

Who Is At Stake?

The American economy is intricately intertwined with those of other nations, with more than one-fifth of American jobs reliant on cross-border business. Last year, when international trade represented 26 percent of the United States' $18.5 trillion in GDP, domestic companies recorded $2.2 trillion in exports and $2.7 trillion in imports.

Since the beginning of 2017, Canada and Mexico have accounted for more than $1 trillion in U.S. business. They respectively rank as the nation’s top two export partners, purchasing 18.3 percent ($266.8 billion) and 15.9 percent ($231 billion) of total exported goods. Canadian imports amount to 12.7 percent ($278.1 billion) and Mexican imports 13.4 percent ($294.2 billion) of the U.S. total to rank the companies third and second, only behind China.

According to a report by the American Enterprise Institute, 14 state economies consider Canada their top import partner, while four turn to Mexico. Another 33 export most to Canada and six to Mexico.

Top imports and exports vary by state regardless of their shared trading partners. In other words, there are no industry trends among states selling to either country.

What Other Deals Are Important?

The North American neighbors aren’t the states’ only critical trading partners. Nearly half the nation calls on China for imports, and another four ship exports there.

European trade appears least profitable, with Germany supplying three states, Ireland two and the United Kingdom another. The U.K. is the top export recipient for two states, France for one and Switzerland another.

Meanwhile, Brazil is the highest export partner for both Florida and Colorado, South Korea imports to Alabama, and Saudi Arabia imports to Louisiana.

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Image Credit: By AlexCovarrubias - Own work, CC BY 2.5, via Wikimedia Commons

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