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Iowa vs. Michigan: Which Industries Are Most Exposed to Export Declines?

By TheFinanceBase Team 11 min read

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Michigan has the sharper concentration risk. Transportation equipment accounted for about 43% of the state’s 2024 goods exports, roughly $27 billion, and the U.S. Trade Representative (USTR) lists $25.2 billion in transportation-equipment manufacturing exports for 2025. Canada alone bought $23.2 billion of Michigan goods in 2025, or 39% of the state total. A shock to vehicles, parts, or North American trade can therefore move quickly through Michigan’s factories and suppliers.

Iowa is less dependent on one industry or one destination, but it has a larger direct exposure to farm commodities. Its leading 2025 export industries were food and kindred products ($3.5 billion), machinery other than electrical ($3.3 billion), chemicals ($2.8 billion), transportation equipment ($969 million), and computer and electronic products ($678 million). Iowa’s 2023 agricultural exports were estimated at $13.5 billion, while Canada took $5.0 billion of Iowa goods in 2024, or 30% of the state total. Iowa’s losses would be more distributed across farms, processors, and input suppliers; Michigan’s could be more concentrated and faster-moving.

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What “exposed to export declines” means

Exposure is not the same as an export decline that has already happened. The figures available for Iowa and Michigan show the size of export industries and the concentration of trading partners. They do not, by themselves, forecast next year’s shipments or prove that a particular sector is currently shrinking.

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For this comparison, an industry is more exposed when a large share of state exports is concentrated in it, when sales depend heavily on a small number of foreign markets, or when tariffs and other trade barriers are likely to affect its prices, inputs, or access to customers. Commodity-price swings, animal or crop disease, transportation interruptions, and supply-chain bottlenecks can also turn a foreign-market problem into a domestic income shock.

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Four tests are useful:

  • Industry concentration: How much of the state’s export value comes from one sector?
  • Destination concentration: How much is sold to Canada, Mexico, or another small group of markets?
  • Commodity and policy sensitivity: Would prices, retaliatory tariffs, sanitary rules, or quotas quickly change demand?
  • Supply-chain depth and substitution: Can producers switch customers and inputs, or are facilities tied to a particular cross-border network?

Michigan ranks as more concentrated on the first two tests. Iowa has the larger direct farm-export exposure on the third. Michigan’s integrated vehicle supply chain creates both scale and a rapid channel for a North American shock on the fourth.

At-a-glance comparison

Measure Iowa Michigan
Largest export exposure Food and kindred products, $3.5 billion in 2025 Transportation equipment, $25.2 billion in 2025; about 43% of 2024 goods exports, or $27 billion
Other leading 2025 export industries Machinery except electrical, $3.3 billion; chemicals, $2.8 billion; transportation equipment, $969 million; computer/electronic products, $678 million Chemicals, $5.5 billion; machinery, $5.1 billion; electrical equipment, $4.3 billion; computers/electronics, $2.7 billion
Agricultural exposure $13.5 billion in domestic agricultural exports in 2023 $2.9 billion in food, agricultural, and forest-product exports in 2024
Exports to Canada $5.0 billion in 2024, 30% of goods exports $23.2 billion in 2025, 39% of goods exports
Total goods-export reference USTR industry figures above are for 2025 $62 billion in 2024 according to MichAuto/SEMCOG and the International Trade Administration

The years and measurement systems differ across these sources, so the table is a risk map rather than a single-year ranking of total exports. Iowa’s agricultural estimate comes from the U.S. Department of Agriculture (USDA) as reported in Iowa’s 2025 Official Register; USTR’s industry figures are goods exports by industry. Michigan’s 43% share is a 2024 goods-export calculation, while the $25.2 billion industry figure is USTR’s 2025 measure.

Iowa’s most exposed industries

Farm commodities form the largest underlying risk

USDA estimated Iowa’s domestic agricultural exports at $13.5 billion in 2023. The Iowa Official Register, citing USDA, identified these leading products:

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Product 2023 export value
Soybeans $3.6 billion
Pork $2.8 billion
Corn $2.2 billion
Feeds and feed grains $1.7 billion
Soybean meal $953 million

These products connect foreign demand to more than farms alone. A decline in soybean, pork, or corn exports can reduce farm receipts, affect grain elevators and meat processors, lower demand for feed and transportation, and pressure suppliers of seed, fertilizer, equipment, storage, and financing. The effect can be broad even when no single processor or farm accounts for a large share of exports.

Commodity exposure also works through prices. If a major buyer restricts imports, the product may remain physically available but sell at a lower price. Producers then face weaker margins, while processors may have to find another destination, alter product specifications, or hold inventory longer. Disease outbreaks, weather-related supply changes, and shipping disruptions can amplify that adjustment, although the available figures do not quantify the probability or size of any one event.

Food processing is Iowa’s largest named 2025 export industry

USTR lists $3.5 billion in Iowa exports of food and kindred products in 2025. This category sits between raw agriculture and manufactured goods: it includes products made from farm inputs and therefore carries both commodity and market-access risk. A tariff on finished food can reduce orders even when farm output is unchanged. Conversely, a disruption in farm supply or input prices can raise processors’ costs and make export contracts less competitive.

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Because Iowa’s agricultural exports are spread across oilseeds, livestock, grains, and feed products, a single market shock does not automatically eliminate all foreign sales. Buyers may substitute among origins or products, and firms may redirect shipments. That diversification reduces single-sector concentration compared with Michigan’s vehicle-heavy profile, but it does not remove Iowa’s sensitivity to global food prices and trade policy.

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Machinery and chemicals add nonfarm exposure

USTR’s 2025 figures show $3.3 billion in Iowa machinery exports, excluding electrical machinery, and $2.8 billion in chemicals. These industries broaden the state’s export base beyond farms but introduce their own input and customer risks. Machinery makers can be affected when overseas customers postpone capital purchases, while chemical producers can face higher costs for imported feedstocks or restrictions on products subject to differing safety rules.

Iowa also exported $969 million in transportation equipment and $678 million in computer and electronic products in 2025. Those amounts are much smaller than Michigan’s transportation-equipment total, yet they matter locally because a plant, supplier, or cluster can be highly dependent on a few contracts even when the statewide category is modest. Statewide diversification should therefore not be read as protection for every Iowa community.

Canada is important, but less dominant than in Michigan

Iowa exported $5.0 billion in goods to Canada in 2024, equal to 30% of its goods exports. Canada is consequently a major customer and a plausible first channel for a tariff or border delay. However, Iowa’s 30% share is below Michigan’s 39%, and Iowa’s leading industries are spread across food, machinery, chemicals, and agriculture rather than centered on one manufacturing system.

A Canada-specific disruption would still reach farms indirectly if processors and feed buyers lose orders. The size of that effect would depend on which products are targeted, whether alternative markets can absorb the volume, and how quickly transport and contracts can be adjusted. The export totals do not establish those response times.

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Michigan’s most exposed industries

Transportation equipment is the clear primary vulnerability

Michigan’s goods exports totaled $62 billion in 2024, according to MichAuto/SEMCOG and the International Trade Administration. Transportation equipment represented about 43%, or approximately $27 billion. USTR’s 2025 industry data put Michigan transportation-equipment manufacturing exports at $25.2 billion. The two figures use different years and source definitions, but both show a dominant sector.

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Vehicles and vehicle parts together represented more than $25 billion in 2024 in the MichAuto report. That concentration means a tariff, border delay, or demand slowdown can affect assemblers, parts makers, logistics companies, tool-and-die firms, and service providers at the same time. Production schedules are interdependent: a missing component can interrupt a line, while a completed vehicle cannot be sold profitably if a key market becomes inaccessible.

Michigan’s auto exposure is therefore not only a question of final-car exports. Cross-border movements of engines, components, materials, and finished vehicles can create repeated effects as a part crosses a border more than once. The available state totals do not measure the number of crossings or the share of content from any one country, but they do establish why an integrated supply chain can transmit a policy shock quickly.

Secondary manufacturing sectors are material

USTR lists Michigan’s 2025 exports at $5.5 billion for chemicals, $5.1 billion for machinery, $4.3 billion for electrical equipment, and $2.7 billion for computers and electronics. These categories provide some diversification, yet they are also tied to industrial demand and imported inputs. A slowdown in vehicle production can reduce orders for machinery, electrical components, and industrial chemicals even when those products are shipped under different tariff classifications.

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The concentration is thus both vertical and geographic. Firms may sell several product lines, but a large customer or plant network can still dominate their order book. A statewide industry total cannot reveal that firm-level concentration, so local exposure should be assessed with company, facility, and supplier data rather than state totals alone.

Canada and Mexico create a powerful North American channel

Canada purchased $23.2 billion of Michigan goods in 2025, or 39% of the state’s goods exports. That is the highest destination concentration identified for either state in the available figures. Michigan also has deep Mexico-linked auto supply chains. A North American demand or tariff shock can therefore propagate through foreign sales, intermediate parts, and production planning at the same time.

High Canadian exposure does not mean every Michigan industry sells primarily to Canada. It means the state total is unusually sensitive to conditions in that market. A Canada-specific barrier would be especially consequential for transportation equipment, while a broader manufacturing tariff could reach chemicals, machinery, electrical equipment, and electronics through input costs and customer demand.

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Agriculture is smaller statewide but still trade-sensitive

Michigan’s Department of Agriculture and Rural Development reported $2.9 billion in food, agricultural, and forest-product exports in 2024. Leading markets included Canada, Mexico, Japan, South Korea, and China. The mix of products and destinations gives Michigan agriculture more geographic variety than a Canada-only measure would suggest, but retaliatory tariffs can still hit producers and processors quickly.

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Michigan Executive Directive 2026-2, dated April 2, 2026, describes the transmission mechanism this way: “Those reports revealed that tariffs increased the price of raw materials, raised production costs, and restricted market access for our products.” The directive also says retaliatory tariffs hurt Michigan exporters, “particularly in agriculture.” Those statements describe channels of harm, not a quantified forecast of future export losses.

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How an export decline reaches households and businesses

Lost foreign sales

The most direct effect is fewer orders from an overseas buyer. Exporters may cut production, reduce overtime, delay hiring, or discount inventory. Farm products can be redirected, but the replacement market may pay less or require different grades, packaging, or certifications. For vehicles and parts, a lost order can interrupt a coordinated production schedule rather than merely reduce one shipment.

Higher input and production costs

Tariffs can raise the price of imported raw materials, components, machinery, and chemicals. A producer may absorb the cost, pass it to a customer, or redesign its sourcing. The executive directive’s description of higher raw-material and production costs applies to this channel. Cost pressure can hurt an exporter even when its own foreign sales have not yet fallen.

Retaliation and restricted access

A trading partner can respond with tariffs or other restrictions on unrelated products. Iowa’s farm exports are exposed because retaliation can target food and agricultural goods; Michigan’s vehicle and industrial exports can be affected through a broader dispute. Sanitary rules, licensing, quotas, and customs delays can function like market-access barriers even when a headline tariff rate is unchanged.

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Local multiplier effects

Export revenue supports transportation, warehousing, maintenance, financial services, and supplier purchases. A decline can therefore spread beyond the exporting plant or farm. Michigan’s dense auto network may produce a faster, more synchronized effect. Iowa’s wider farm and food network may spread the effect across more counties and business types, with the adjustment showing up through commodity prices, processor margins, and equipment demand.

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Which state would be hit harder in common scenarios?

A tariff aimed at vehicles and parts

Michigan is more exposed. Transportation equipment is its dominant export sector, and Canada accounts for 39% of goods exports. The combination of sector concentration and North American supply-chain integration gives a vehicle tariff a direct path into production schedules and supplier orders. Iowa would feel secondary effects through machinery, chemicals, and general economic demand, but its statewide export mix is less centered on vehicles.

Retaliation aimed at farm products

Iowa is more exposed in direct dollar terms because its agricultural exports were estimated at $13.5 billion in 2023, with large soybean, pork, corn, feed-grain, and soybean-meal categories. Michigan agriculture also faces retaliation, and the state directive specifically highlights that risk, but Michigan’s reported food, agricultural, and forest-product exports were $2.9 billion in 2024. The figures are not identical measures, yet they indicate a larger farm-export base in Iowa.

A Canada-wide slowdown or border disruption

Michigan is more exposed by destination share and value: $23.2 billion, or 39% of goods exports, went to Canada in 2025. Iowa’s Canada exports were $5.0 billion, or 30%, in 2024. Iowa’s food, machinery, and chemical exporters could still be affected, but Michigan has less room to avoid a Canada shock without quickly replacing a large block of sales.

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A broad global manufacturing downturn

Michigan would face a concentrated industrial hit because transportation equipment, machinery, chemicals, electrical equipment, and electronics are all significant export categories. Iowa would face weaker machinery and chemical demand as well, alongside lower commodity prices and food orders. Iowa’s broader mix may cushion any one sector, while Michigan’s integrated industrial base may magnify a synchronized downturn.

How to measure an actual decline rather than exposure

To determine which state is experiencing the larger realized drop, use a consistent data series rather than comparing the headline figures above. The U.S. Census Bureau makes state trade data available by six-digit Harmonized System product, four-digit North American Industry Classification System industry, partner country, and monthly or annual period. The International Trade Administration’s State TradeStats Express supplies state-by-partner data at NAICS two-, three-, and four-digit levels.

  1. Choose one period and definition. Compare the same months or calendar years and use the same origin-of-movement convention for both states.
  2. Choose the industry level. Use NAICS when comparing industries and Harmonized System codes when tracking a specific product such as soybeans, pork, vehicles, or parts.
  3. Choose partners. Report total exports and separate Canada, Mexico, and other major destinations so a market-specific shock is visible.
  4. Calculate the change. Compute the year-over-year dollar and percentage change for each state, industry, and partner.
  5. Check concentration. Divide each industry’s exports by the state total and each partner’s exports by total goods exports.
  6. Interpret cautiously. A decline may reflect prices, quantities, exchange rates, timing, or reclassification. Do not label a sector “in decline” from concentration alone.

Census’s TIPS system links traded products to industries and provides 2021–2023 export files, but Census labels that product experimental. USDA agricultural-export estimates and Commerce goods-export statistics use different methodologies; adding them together would overstate the size of either state’s export economy.

Bottom line

Michigan is the more concentrated export risk: transportation equipment accounts for roughly 43% of its goods exports, and Canada takes 39% of the total. A vehicle or North American trade shock would likely be felt quickly by automakers, parts suppliers, and related manufacturers. Iowa’s exposure is broader but more agricultural. Its $13.5 billion in 2023 farm exports make soybeans, pork, corn, feed grains, and soybean meal especially sensitive to foreign demand, commodity prices, and retaliation. If the question is which state is more vulnerable to an auto-and-Canada shock, the answer is Michigan. If it is which state has more direct farm-export risk, the answer is Iowa.

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