These MI Industries Hit Hardest In Tit-For-Tat U.S.-China Trade War

MICHIGAN — President Donald Trump’s escalating trade war puts about $2.8 billion in exports and 21,320 jobs on the line for Michigan businesses and industries, according to the U.S.-China Business Council.

Trump pulled back on some tariffs Wednesday, leaving a 10 percent across-the-board tariff in place, but delaying more punitive taxes for 90 days with a lone exception. China increased its duties on U.S. goods to 84 percent in response to the tariffs, and Trump stuck back by raising the duty on imports from China to 125 percent.

The stock market quickly responded to the announcement, with stocks surging to one of their highest gains since World War II.

In 2023, U.S. exports to China amounted to $144.9 billion and supported almost 1 million jobs. The tariffs have divergent effects on states, even within industries. The hardest hit are those that produce soybeans, semiconductors, pharmaceutical preparations and crude oil, the top U.S. exports to China.

Michigan's top exports to China include automobile parts ($441 million), oilseeds and grain ($371 million), automobiles ($241), glass and glass products ($194 million) and navigational and measure instruments ($133 million).

Last week, Stellantis announced Thursday that it was pausing operations at two assembly plants, leading to 900 layoffs across the Midwest, including at two metro Detroit stamping plants. The automaker said the move is directly tied to the auto tariffs, which are to take effect by May 3.

The Detroit Regional Chamber and Michigan Auto warned the tariffs would result in significant pain for auto workers.

"The increased costs would cause significant disruption throughout the supply chain and, perhaps most importantly, lead to significant price increases to the cost to American consumers for vehicles," the auto group said in a letter obtained by Reuters.

Speaking at an event in Washington on Wednesday, Michigan Gov. Gretchen Whitmer called for exempting autos from tariffs.

"Let's carve out autos and energy, both of which are critical to manufacturers and directly impact people's wallets," she said.

Of the $144.9 billion in exports in 2023, $125 billion was for products grown, produced or manufactured domestically, and the remainder was for foreign goods re-exported to China, according to the U.S.-China Business Council report,

More than 931,000 U.S. jobs are supported by exports to China, outnumbering those supported by the next two Asian markets combined, the report said. Agriculture and livestock exports to China support more U.S. jobs than any other sector by a wide margin.

The report noted that U.S. exports to China dropped by 4.3 percent in 2023 due to stunted economic growth in China, Russia’s war in Ukraine, and strained U.S.-China relationships, as well as long-standing barriers such as tariffs. Soybeans, other oilseeds, and grains fell by $7 billion.

“Challenges in that sector worsen if other producers continue to become more competitive or if these products are targeted in a future tariff spat,” the report said.

Exports of semiconductors have also fallen by several billion dollars, or 52 percent since the peak in 2021. Oregon was among the hardest hit states by the national decline in this category.

The full 2024 report on U.S. exports to China is available online.

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