Recent tit-for-tat tariffs between the United States and Canada are poised to inflict disproportionate economic harm on consumers and businesses in states bordering the northern frontier, according to analysts. These states are pivotal to the upcoming midterm elections in November, which will determine control of Congress, with particular attention on Senate contests in Maine, Ohio, and Michigan.
The fresh levies, impacting approximately $20 billion in Canadian goods, are expected to drive up prices for a range of imported items, many of which are predominantly sold in U.S. states along the border. Concurrently, retaliatory tariffs imposed by Canada could curtail sales for American businesses that export products to their northern neighbor. A decline in cross-border tourism may also negatively affect companies situated within easy travel distance of Canada.
"If you go far up north, it's an arbitrary line in the dirt between what's in Canada and what's in the U.S.," said Tyler Schipper, a professor of economics at the University of St. Thomas in Minnesota.
While the current tariffs affect only a small fraction of the total trade between the two countries—6% of U.S. imports into Canada and 5% of Canadian imports into the U.S.—their effects are anticipated to be more pronounced in states with substantial trade volumes with Canada. The Royal Bank of Canada found that Canada is the top foreign market for exports from 26 U.S. states and the primary source of imports for 22 states. Maine and Michigan are among the top 10 states for combined annual trade with Canada, while Ohio ranks 15th, according to RBC data.
"Someone in Oklahoma doesn’t feel this as much as someone in Dearborn, Michigan," noted Jason Miller, a professor of supply chain management at Michigan State University, highlighting the geographic concentration of the economic impact. "It's purely a geography story."
Automotive Sector Vulnerability
Michigan's significant automotive industry has already experienced strains from previous tariffs. In April, the Trump administration imposed a 25% tariff on imported cars and auto parts, affecting an integrated supply chain spanning the U.S., Mexico, and Canada. Although goods compliant with the United States-Mexico-Canada Agreement (USMCA) were initially exempt, the measure still resulted in $12.5 billion in duties on auto-related imports last year, according to the Anderson Economic Group.
An escalation looms as President Donald Trump has threatened to increase tariffs on Canadian-made cars and auto parts from 25% to 50% starting in January, with no mention of an exemption for USMCA-compliant products. Glenn Stevens Jr., executive director of MichAuto, a Michigan-based automotive industry trade group, warned that such a move "would absolutely be untenable for the industry to operate under. It would decimate supply chains and virtually grind business to a halt."
This potential increase could lead to higher consumer prices and job losses in Michigan, Stevens added. He also emphasized the growing prominence of trade policy as a campaign issue leading up to the midterms.
Political Ramifications in Key States
The trade dispute has become a focal point in political campaigns. In Michigan's Senate race, Democratic candidate Abdul El-Sayed has criticized Republican Rep. Mike Rogers for his support of Trump's trade strategy, characterizing it as an escalation driven by vanity. Rogers' campaign has largely defended the president's approach, arguing that economic pressure on Canada is necessary to protect American jobs.
The White House has defended the tariffs, stating they aim to prioritize American workers, farmers, and businesses, arguing that past trade relations with Canada have been lopsided. "President Trump will never stop fighting to put Americans and America First," a White House spokesperson stated.
In Maine, Republican Sen. Susan Collins, seeking reelection, expressed concern that the trade dispute would increase costs for the state's families and businesses. Her Democratic challenger, Troy Jackson, has labeled the tariffs a "direct tax on working families" and emphasized the importance of trade with Canada to Maine's economy.
Despite the trade policies becoming a campaign talking point, some residents in border states remain undecided. Fred Fritz, a retiree in East Lansing, Michigan, expressed dissatisfaction with the tariffs but remained undecided in the state's closely watched Senate contest, citing reservations about both major candidates.
Garret Denniston, CEO of Barters Island Bees in Maine, noted that sales had recently rebounded after a previous dip attributed to trade tensions, but expressed worry that a renewed dispute could again impact tourism and business. "We thank Canadian tourists every time we see them," Denniston said, adding that he believes the trade war can influence the competitive Senate race in Maine.