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On 1 February 2025, U.S. President Donald Trump announced that he would place tariffs on Mexico, Canada, and China, kicking off a series of counter actions from the targeted nations, escalations, and pull backs that have created confusion and left markets reeling. While the Trump administration has attempted to allay public fears by referring to the economic downturn as a “detox” and a “transition” period, experts are concerned that the trade war could escalate further.
“There have been announcements that have then been walked back, we saw some of that with Canada and Mexico, but the environment is still very escalatory,” Ian Bremmer, president and founder of the Eurasia Group, said in an interview with Foreign Policy.
Since that first week in February, the U.S. and the nations involved have engaged in a back-and-forth trade war, with announcements of tariffs being made and taken back sometimes multiple times in a day. It is hard to know for sure what the final policies will be, but one thing is certain — the trade war between the U.S. and its most important trade partners will have profound effects on U.S. states and industries.
Tariff Timeline
Past U.S. actions:
1 February: Announced a 25% tariff would be imposed on all goods coming into the U.S. from Canada and Mexico, with a 10% tariff on energy resources from Canada and a 10% tariff on all goods from China.
3 February: Delayed tariffs on Mexico and China until 4 March.
5 February: Implemented a 10% tariff on all goods imported from China.
4 March: Imposed 25% tariffs on all imports from Canada and Mexico and raised the tariff on all imports from China to 20%.
5 March: Eliminated tariffs on automotive products from Mexico and Canada that meet the requirements of the United States-Mexico-Canada Agreement (USMCA).
6 March: Delayed many of the tariffs imposed on Mexico and Canada until 2 April.
11 March: Implemented a 25% tariff on all steel and aluminum imports into the U.S.
13 March: Imposed a 200% tariff on French wine and EU spirits.
Proposed U.S. Actions:
2 April: Impose 25% tariffs on all external agricultural goods and fully implement the 25% tariffs on Canada and Mexico that have been delayed so far.
Threatened a 25% tariff on all goods coming from the EU, but the specific date has not been announced.
Retaliatory Actions:
4 February: China placed a 10% tariff on certain industrial products and a 15% tariff on coal and liquified natural gas coming from the U.S.
10 February: China implemented a 15% tariff on chicken, wheat, corn, and cotton from the U.S. and an additional 10% on other agricultural products.
4 March: Canada announced a 25% tariff on $155 billion of goods coming from the U.S., with $30 billion implemented immediately.
4 March: China broadened its 10-15% tariff to include another $21 billion-worth of American agricultural and food products.
11 March: The EU announced plans to implement “proportionate countermeasures” on the U.S. in response to the sweeping steel and aluminum tariffs.
12 March: Canada implemented an additional 25% tariff on $29.8 billion of goods coming from the U.S. in response to the U.S. tariffs on steel and aluminum.
13 March: Canada imposed an additional 25% tariff on $29.8 billion of products imported from the U.S.
Proposed Retaliatory Actions:
1 April: EU will end its current suspension on U.S. products
13 April: EU tariffs on $28 billion-worth of U.S. goods will be in full effect
Effect of the Tariffs on States
On 4 March 2025, hours after the U.S. president imposed 25% tariffs on Canada and Mexico, former Canadian Prime Minister Justin Trudeau announced that his government would be implementing reciprocal 25% tariffs against $30 billion worth of American goods. A week later, after President Trump levied a universal tariff on steel products, the Canadian government expanded tariffs to another $29.8 billion worth of goods.
While President Trump postponed some of the American tariffs until 2 April 2025, Canada’s former prime minister made it clear that he had no intentions of pulling back the Canadian tariffs, saying, “We are reasonable, we are polite, but we will not back down from a fight.”
China also levied reciprocal tariffs against the U.S., with levies placed on $21 billion worth of agricultural and food products. As of publication, Mexico has not levied tariffs against the U.S. However, on 9 March 2025, at a rally in Mexico City, Mexican President Claudia Sheinbaum stated, “We must be aware and informed in case it is necessary for us to again gather in this public square,” signaling that retaliatory actions against the U.S. were not off the table.
While the entire nation will feel the economic impact of these tariffs, several states are expected to feel a heavier burden, as their economies are more dependent on imports from Canada and Mexico. Montana imports 93% of its goods from Canada and Mexico, the most of any state. Maine is second at 71%, followed by Michigan and Vermont at 70% and North Dakota at 68%. The Yale Budget Lab estimates that the households in the United States could be looking at a loss of between $1,100 to $1,400 due to the increased cost of goods caused by the tariffs.
Despite the possible economic impacts, reactions to the tariffs by state leaders are mixed. In a 6 March press conference, Montana Governor Greg Gianforte supported President Trump’s actions, saying, “For the first time in a long time we have a president that is that is negotiating on behalf of the American people. [The tariffs] are going to create a little disruption in the short term, but I think Americans are prepared and understand the need for some of that disruption to get us in a better place.”
Governor Janet Mills of Maine, however, is not so optimistic about the president’s actions. “The president’s broad tariffs on our major trading partners will increase prices for Maine people and businesses and cause havoc to our economy,” said Mills. “While today’s temporary tariff reprieves are welcome, they are creating significant economic uncertainty that is also damaging to our people, businesses, and our economy.”
Non-Tariff Impacts on States
On top of tariffs, Ontario Premier Doug Ford announced on 4 March 2025 a 25% surcharge on all electricity exports to homes and businesses in New York, Minnesota, and Michigan, possibly increasing the electric bill for businesses and households in the state by up to $100 a month. This surcharge was pulled back on 11 March 2025 after Premier Ford had a conversation with U.S. Secretary of Commerce Howard Lutnick. However, in a conversation with NBC News, Premier Ford did not rule out bringing the surcharge back.
“For decades, Ontario has powered American homes, factories, offices and jobs, and we will not stand by as our vital electricity exports are taken for granted,” said Stephen Lecce, minister of Energy and Electrification of Ontario. “In a time where prices are going up for families in America, Canada and the United States should be working together to strengthen our trade and investment relationships to ensure a prosperous future for both sides of the border.”
For the states that would be affected by an increase in electricity costs, the pause is a welcome reprieve but does not alleviate all concerns of the economic impact the trade ware will cause. In a statement to 3E, a representative of the Minnesota Department of Commerce explained their concerns over the tariffs.
“The actions by the U.S. federal government on tariffs are placing Minnesota residents and businesses in the crossfire of trade wars. Because of Minnesota’s high dependence on Canadian sources of energy, tariffs on energy resources will disproportionately affect Minnesotans in their pocketbooks,” said the spokesperson. “Many of our businesses depend on trade with Canada, including the energy sector. Tariffs, whether they are a threat or actual tax on energy, make the energy everyday Minnesotans rely on unstable and uncertain.”
If the surcharge does return on Canadian electricity, the Michigan Public Service Commission told 3E that the impacts would not only be felt on pricing and reliability of electricity in the state but could also affect the electric grid.
“There are significant flows across the border because of the interconnected grids between the two countries,” noted the commission. “Michigan is part of the Midcontinent Independent System Operator (MISO), the regional transmission operator for 15 states and the Canadian province of Manitoba. MISO and Ontario’s regional transmission operator, Independent Electricity System Operator (IESO), coordinate flow levels. Any action to limit or disrupt these flows would remove a layer of protection and make all of us — Canadians and Americans alike — more vulnerable to grid-scale outages.”
Industry Impacts and Response
Tariffs have an immediate effect on the businesses and industries conducting international trade. In the interview with Foreign Policy, Bremmer said that many CEOs are secretly worried about the impact the administration’s trade policies will have on their companies, but they are not admitting it out loud.
“The gap between what they say privately and what they say publicly has never been so great in my lifetime,” Bremmer said. “They are extremely concerned that they will be taken down a peg or more if they are oppositional publicly towards any of Trump’s policies, but they are very deeply worried about what the implications of these tariffs will be.”
With the huge amount of international trade that the U.S. conducts, blanket tariffs are concerning to many industries. Further, tariffs on specific goods, such as on steel, aluminum, and agricultural products, carry extra implications for the industries reliant on them.
Manufacturing: The National Association of Manufacturers’ (NAM) most recent survey showed that trade uncertainty was the number one business concern of Q1 2025, with increasing raw material costs being the second biggest concern. Respondents of the survey expect costs to increase an average of 5.5%, the highest rate of increase since Q2 of 2022.
“The stakes couldn’t be higher for manufacturers right now. Many manufacturers are operating on thin margins, and the tariffs imposed today will further strain their resources,” NAM CEO Jay Timmons said in a statement.
Timmons gave examples of the hundreds of millions of dollars in cost increases that companies will experience due to tariffs, both that the U.S. has imposed on North American trade partners and the reciprocal tariffs from Canada. The NAM’s primary solution to mitigating these tariffs on a policy front is advocating for President Trump’s 2017 tax reforms to become more permanent and competitive, in addition to streamlining regulatory processes and strengthening the manufacturing workforce.
Automotive: While most industrial associations are calling for President Trump to reconsider his tariff policies, the United Auto Workers (UAW) is praising the administration for its “aggressive action” against free trade, which the UAW said disadvantages the working class.
“There’s been a lot of talk of these tariffs ‘disrupting’ the economy,” the UAW said in a press release. “But if corporate America chooses to price-gouge the American consumer or attack the American worker because they don’t want to pay their fair share, corporate America bears the blame for that decision.”
The UAW’s argument is that free trade has allowed corporations to outsource cheaper labor from other countries, taking blue-collar jobs from the U.S. and that tariffs will force corporations to undo anti-worker trade deals.
But other industry groups don’t see it that way. American Automotive Policy Council (AAPC) President Matt Blunt called on the administration to reconsider raising tariffs on automobile products that meet the USMCA trade agreement in the interest of the auto industry.
“Our American automakers … should not have their competitiveness undermined by tariffs that will raise the cost of building vehicles in the United States and stymie investment in the American workforce,” Blunt said in a statement.
President Trump ended up pausing his tariffs of USMCA-approved auto products, but tariffs on steel and aluminum remain in place.
Chemicals: The chemical industry is the second largest export manufacturing sector after automotive. According to the American Chemistry Council (ACC), the U.S. chemical industry posted a trade surplus of more than $28 billion in 2024, with exports supporting nearly 200,000 domestic jobs.
“The U.S. enjoys a trade surplus on chemical products with Canada and Mexico and a prolonged trade conflict will increase our industry’s costs and impact manufacturers that utilize our products, including everything from healthcare to agriculture to technology,” the ACC said in a statement to 3E.
Canada and Mexico are the largest trade partners for U.S. chemistry, and the ACC said many chemical products cross North American borders multiple times throughout the manufacturing process. The extra duties added each time the products cross the border will make domestic production of those products more expensive, likely leading producers to increase prices for consumers.
Not only is the trade war directly affecting the countries involved, but it is also worrying other chemical markets across the globe. The Chinese chemicals market is dealing with a lot of overcapacity, and many of those excess products are making their way into Europe and weakening demand in the EU and UK, according to Steve Elliott, CEO of the Chemical Industries Association.
“The U.S. market might be less attractive with tariffs on board for Chinese products that they might go elsewhere,” Elliott told 3E, saying an increase in Chinese chemical sales in Europe could further contribute to weakening demand.
Oil/ energy: Oil is one of the most important trade commodities between the U.S. and Canada as it is the U.S.’s largest Canadian import. The energy relationship between the U.S. and Canada is an important one, as some refineries in the Midwest are specifically designed to handle the crude oil that comes from Canada. These refineries rely on Canadian oil imports for their supply, and the Canadian oil producers rely on the U.S. refineries for their market. Despite President Trump’s less significant tariff on Canadian energy resources — 10% versus 25% — energy industries are bracing for impact.
When the tariffs were first announced at the beginning of February 2025, CEO Mike Sommers of the American Petroleum Institute (API) released a statement emphasizing the high level of integration between North American nations and that “free and fair trade across our borders is critical for delivering affordable, reliable energy to U.S. consumers.”
In his most recent remarks on tariffs at the beginning of March, Sommers stated: “We will continue to work with the administration on trade policies that unleash our nation’s vast oil and natural gas resources.”
The Independent Petroleum Association of America (IPAA) explicitly called out the tariffs on steel and aluminum, stating they will increase the cost of well construction for U.S. oil and natural gas producers.
“Steel imports are essential to the industry and imports comprise up to half of the U.S. supply for the specific quality of steel in the line pipe and oil country tubular goods (OCTG) marketplace,” IPAA CEO Jeff Eshelman said in a statement. “The new tariffs on steel and aluminum imports could undermine the successes of the administration’s goal of American energy dominance.”
Agriculture: The U.S. engages in significant agricultural trade worldwide, with the United States Department of Agriculture (USDA) noting total agricultural imports more than quintupled in value between 1998 and 2023, reaching $195 billion in 2023. In addition to the tariffs imposed on Canada and Mexico, President Trump has a plan to impose a 25% tariff on all imported agricultural goods — something he sees as a good thing for American farmers.
Based on a post on social media platform Truth Social, the president believes that U.S. consumers will fill any void in sales created by the tariffs, which he said will begin 2 April 2025, extolling farmers to “Have fun!”
According to the National Farmers Union (NFU), tariffs are the opposite of “fun” for U.S. farmers and ranchers. NFU President Rob Larew commented on the president’s decision to implement tariffs on Canada, Mexico, and China, saying that the industry is already facing significant economic uncertainty, and that these actions only add to the strain.
“Trade policies must come with real, tangible protections for the farmers directly affected. We’ve heard there’s a strategy in place–now we need to see it,” Larew said. “Promises alone won’t pay the bills or keep farms afloat.”
Larew said that the tariffs specifically on Canada, Mexico, and China, along with retaliatory measures from China and Canada, will have serious consequences for American agriculture, and fair-trade policies are necessary for ensuring farmers can compete on a level playing field instead of being caught in the middle of international disputes. Larew said that without a clear plan, family farmers will be left to bear the burden of decisions beyond their control, and eventually, so will consumers.
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Editor’s Note: 3E is expanding news coverage to provide customers with insights into topics that enable a safer, more sustainable world by protecting people, safeguarding products, and helping businesses grow. Data Insight articles, produced by reporters, feature compelling charts and infographics, including analyses that help customers better understand the challenges and opportunities presented by an evolving global regulatory landscape.
About the Authors:
Sheridan Wood is 3E’s Industry Reporter. She has reported on local, state, and national environmental news for public radio stations KACU, The Texas Standard, and National Public Radio. She has won regional and national reporting awards from the Society of Professional Journalists and earned her degree in journalism from Abilene Christian University.
Christopher Bornmann is the State Regulatory and Legal Action Reporter for 3E based in Washington, D.C. He covers the latest legal developments and updates in environmental, health, and safety (EHS) that impact the U.S. at the state level. He has experience working for the U.S. House of Representatives and national advocacy groups.
About the Contributors:
Adnan Malik is a Production Specialist and Graphic Designer on 3E’s News team. With nearly a decade of experience, he specializes in various design solutions. He holds a Diploma in Information Technology, which complements his extensive expertise in various fields and Industries.
Dolan Harrington is a Data Journalist at 3E. His analytics career has spanned organizations including Delta Air Lines, Pendo (a unicorn product analytics startup), and S&P Global. He has a master’s degree in business analytics from William & Mary.
