A year after the so-called “Liberation Day,” when President Donald Trump raised tariffs across the board, trade has become volatile, and the impact can be seen at the state level. Fitch Ratings examined trade data from the U.S. Census Bureau and found that products with tariff exemptions were less affected by trade shifts, while products that faced higher tariffs saw imports fall. Fitch Ratings is owned by our parent company, Hearst.Tariffs are taxes imposed by a government on goods and services imported from other countries. On April 2, 2025, Trump announced sweeping tariffs on most U.S. imports reaching as high as 125% on goods coming from China and a baseline tariff of 10% on all goods entering the U.S. On Feb. 20, 2026, the U.S. Supreme Court invalidated the use of the International Emergency Economic Powers Act to impose broad tariffs. Days later, Trump signed an executive order setting a temporary 10% import duty for a period of 150 days. Olu Sonola, the author of the report and Head of U.S. Economics at Fitch Ratings, said trade has become ‘very volatile’ since reciprocal tariffs were put in place. Products that were given higher tariffs, making it more expensive to bring those goods into the country, saw imports go down. Autos and parts imports fell 14% year over year in 2025 after President Trump imposed a 25% tariff on automobiles and parts from foreign countries. Products that were able to “survive the tariff scare,” according to Sonola, were the ones that were exempted from tariffs. This includes pharmaceuticals, chemicals and semiconductors, which all saw positive growth in 2025.Machinery, excluding electrical, saw the biggest growth in 2025 as it rose 25% from a year earlier to $654 billion, up from $521.2 billion in 2024. “The products that did well didn’t have tariffs on them. They were specifically exempted from tariffs, and they also benefited from the AI boom. So we saw that play a role in the ones that did really, really well,” said Sonola. This has widened the gap with other states that are not investing heavily in data centers. Texas and New Mexico, which have become emerging data center hubs, saw imports grow by 4% and 34%, respectively, likely driven by machinery imports or AI-related investments.Where does each state import or export to? Tariffs have also affected imports of certain products by making goods from some trading partners more expensive, the study shows. An example is toys, games and sports equipment, which saw a 14% year-over-year drop in imports, as many of these products used to come from China.As a result, trade has shifted to countries facing lower tariffs. Cell phones, which Sonola said used to come from China, are now being made in India, a country with lower tariffs.Despite the additional customs duties, China remains among the top countries from which the United States imported its goods in 2025, accounting for 9% or $308 million worth of imports. The European Union is the top source of imported goods, accounting for 18%, or $633 million, followed by Mexico at 15%, Canada at 11% and Vietnam at 9%. Sonola said consumers have started to feel the effects of tariffs, but much has yet to be passed on by companies that have taken some of the brunt.”If you have to put a number to it, maybe about 50% of has already been passed through . We still think there’s a bit more to come in 2026,” said Sonola.Inflation has remained stable at 2.5%, which is nowhere near the 9% inflation in June 2022, and exports have stayed resilient, according to Sonola.
A year after the so-called “Liberation Day,” when President Donald Trump raised tariffs across the board, trade has become volatile, and the impact can be seen at the state level.
Fitch Ratings examined trade data from the U.S. Census Bureau and found that products with tariff exemptions were less affected by trade shifts, while products that faced higher tariffs saw imports fall.
Fitch Ratings is owned by our parent company, Hearst.
Tariffs are taxes imposed by a government on goods and services imported from other countries. On April 2, 2025, Trump announced sweeping tariffs on most U.S. imports reaching as high as 125% on goods coming from China and a baseline tariff of 10% on all goods entering the U.S.
On Feb. 20, 2026, the U.S. Supreme Court invalidated the use of the International Emergency Economic Powers Act to impose broad tariffs. Days later, Trump signed an executive order setting a temporary 10% import duty for a period of 150 days.
Olu Sonola, the author of the report and Head of U.S. Economics at Fitch Ratings, said trade has become ‘very volatile’ since reciprocal tariffs were put in place.
Products that were given higher tariffs, making it more expensive to bring those goods into the country, saw imports go down. Autos and parts imports fell 14% year over year in 2025 after President Trump imposed a 25% tariff on automobiles and parts from foreign countries.
Products that were able to “survive the tariff scare,” according to Sonola, were the ones that were exempted from tariffs. This includes pharmaceuticals, chemicals and semiconductors, which all saw positive growth in 2025.
Machinery, excluding electrical, saw the biggest growth in 2025 as it rose 25% from a year earlier to $654 billion, up from $521.2 billion in 2024.
“The products that did well didn’t have tariffs on them. They were specifically exempted from tariffs, and they also benefited from the AI boom. So we saw that play a role in the ones that did really, really well,” said Sonola.
This has widened the gap with other states that are not investing heavily in data centers. Texas and New Mexico, which have become emerging data center hubs, saw imports grow by 4% and 34%, respectively, likely driven by machinery imports or AI-related investments.
Where does each state import or export to?
Tariffs have also affected imports of certain products by making goods from some trading partners more expensive, the study shows. An example is toys, games and sports equipment, which saw a 14% year-over-year drop in imports, as many of these products used to come from China.
As a result, trade has shifted to countries facing lower tariffs. Cell phones, which Sonola said used to come from China, are now being made in India, a country with lower tariffs.
Despite the additional customs duties, China remains among the top countries from which the United States imported its goods in 2025, accounting for 9% or $308 million worth of imports.
The European Union is the top source of imported goods, accounting for 18%, or $633 million, followed by Mexico at 15%, Canada at 11% and Vietnam at 9%.
Sonola said consumers have started to feel the effects of tariffs, but much has yet to be passed on by companies that have taken some of the brunt.
“If you have to put a number to it, maybe about 50% of [tariffs] has already been passed through [to the consumer]. We still think there’s a bit more to come in 2026,” said Sonola.
Inflation has remained stable at 2.5%, which is nowhere near the 9% inflation in June 2022, and exports have stayed resilient, according to Sonola.
