News Story

Foreign Trade More Important To Michigan Than Any Other State

‘Imports plus exports added up to 38.9 percent of Michigan GDP’

Two University of Michigan economics professors independently reported that foreign trade plays a larger role in Michigan’s economy than in any other state in the nation.

Specifically, they said that imports and exports make up a larger percentage of Michigan’s gross domestic product than any other state in the country. Gross domestic product, or GDP, is defined as the total value of goods produced and services provided in a state or country in a year.

“Both imports and exports are hugely important for the Michigan economy; exports because their production creates income and employs workers, and imports because they provide inputs to production that make that production more competitive,” said Alan Deardorff, an economics professor at the University of Michigan. “Imports plus exports added up to 38.9 percent of Michigan GDP, more than any other state.”

Mark Perry, a finance and economics professor at the University of Michigan-Flint, said that despite rust-belt perceptions, Michigan has become the most globalized state over time, which reflects the globalization of the automobile industry.

“As a state economy highly dependent on both exports and imports, Michigan is a state that would be at great risk from Trump’s protectionist trade policies including the recent tariffs on steel and aluminum,” Perry said.

Mackinac Center fiscal analyst James Hohman provided figures from the U.S. Department of Commerce's recent report that support the professors’ statements.

-- Michigan’s exports reached $59.8 billion in 2017, the highest recorded going back to 2000.

-- Canada was the largest customer for Michigan’s goods and services at $24.8 billion.

-- Mexico was the second-largest customer at $12.5 billion, and China was third at $3.7 billion.

-- Michigan exported products to more than 200 countries last year.

-- Records show that Michigan even sold products and services worth $3,290 to buyers on Christmas Island, an Australian territory in the Indian Ocean with about 1,400 residents.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.