If you follow this blog, chances are you’ve run across at least some standard economic theories. For example, (1) countries export what they can produce at a comparative advantage and import the other stuff and (2), with nearly unequivocal agreement, free trade is seen as beneficial overall for trading partners. You may also be following the escalating tensions between the U.S. and its trading partners (China, Canada, Mexico, Europe, etc.) over tariffs enacted by the U.S. to protect import-competing industries and the retaliatory tariffs enacted by the other countries. So let’s see if FRED data can connect a little theory with current events.
To keep it simple, we look at U.S. state exports to Canada and then to China. The first map makes it clear that northern states export more to Canada than other states. This aligns well with standard economic models: The factors that determine trade relationships include distance between countries, incomes of trading countries, common languages, and common borders. But we also see that larger states such as California and Texas are major exporters to Canada, too. In 2016, U.S. states exported goods worth around $193.7 billion to Canada. Michigan and Ohio were the largest exporters, with a combined 20.19% of total state exports to Canada.
The second map shows that many of the major exporters to Canada are also major exporters to China, including California, Texas, Michigan, and Ohio. Several of these states serve as major ports (California, Texas, and Ohio, for instance), which is one potential explanation for why these states are major exporters in both cases. U.S states exported goods worth $93.9 billion to China, with 25.75% of them originating in California and Ohio.
You might be asking yourself why state-level trade patterns matter. One reason is that states aren’t all invested in international trade to the same degree. Trade affects states differently, according to their specific industries and those industries’ exposure to foreign purchases of their products. And these trade patterns can provide insights into how tariffs and other changes in international trade could affect specific U.S. cities, states, and regions.
How these maps were created: Go to GeoFRED and click on “Build New Map.” Under “Tools,” set Region Type to “State” and Data to “Value of Exports to Canada.” Choose data from the year 2016. Repeat the same process for the second map, with the Data option set to “Value of Exports to China.”
Suggested by Asha Bharadwaj and Maximiliano Dvorkin.