An analysis from The Pew Charitable Trusts highlights that states with significant manufacturing sectors and strong global trade connections, including New Jersey, may be particularly susceptible to fiscal challenges if import costs rise due to tariffs.
Justin Theal of Pew’s Fiscal 50 Project noted that New Jersey and other coastal states with major ports could experience direct effects from tariffs through changes in shipping volumes and potential disruptions in logistics. In 2024, global imports made up $153 billion, or 18.1% of New Jersey’s gross domestic product (GDP).
Other coastal states where imports are a substantial part of the state economy include South Carolina (16.6%), Georgia (16.5%), Texas (16.7%), and California (12.0%).
Theal also pointed out that states whose economies depend on manufacturing—especially those using imported materials for industries like automotive and metals—face heightened financial uncertainty. States such as Kentucky (imports make up 32.3% of GDP), Michigan (24.5%), Tennessee (21.9%), Indiana (20.2%), Illinois (19.2%), and Alabama (12.1%) could see increased production costs and local economic disruption.
“The exposure of a state’s finances can vary dramatically depending on how heavily the state relies on imported goods relative to its total economy (measured by gross domestic product, or GDP), how much each state purchases in tariffed goods, and how dependent it is on tax revenues that are sensitive to shifts in consumer spending,” Theal said.
“While all states face some degree of fiscal disruption from increased tariffs, any resulting effects will take time to surface in state budget data," Theal said. “However, the uncertainty alone can be enough to affect economic behaviors and prompt consumers to become more cautious; slow spending; and cause businesses to delay investments.”
According to Theal, many states are already lowering their revenue forecasts as they prepare for possible tariff-related uncertainties along with other economic pressures.
Across the United States in 2024, imported goods totaled $3.3 trillion, accounting for about 11.2% of overall economic activity nationwide. Major categories included computer and electronic products ($550 billion), transportation equipment ($490 billion), chemicals ($390 billion), machinery excluding electrical equipment ($250 billion), and electrical equipment/appliances/components ($200 billion). Computers, vehicles, pharmaceuticals, machinery, and electrical equipment were among the top U.S imports most exposed to new tariffs.
Goods from China remain especially significant since Chinese products have been subject to some of the highest U.S.-imposed tariffs as well as retaliatory measures by China.
New Jersey specifically imported $14.2 billion worth of goods from China in 2024—about 1.7% of its GDP—according to Pew’s findings.
Theal explained there is limited historical precedent for such rapid implementation of broad-based trade barriers in the U.S., making it challenging for officials at the state level to plan budgets effectively.
“Although manufacturers, importers, and wholesalers are paying the new and expanded tariffs now, it remains unclear how quickly—and how fully—the added costs will be passed on to consumers through higher prices, and how that will affect state tax revenues and spending,” Theal said.
To read the complete Pew analysis, go here.
