Tariffs on goods from Mexico will impact Arizona more than most states.
Arizona engages in trade with many countries around the world. For goods in 2024, the value of Arizona exports to the world was $32.2 billion, while for imports the total was $42.2 billion.
Since Arizona is integrated into the global economy, the imposition of tariffs will impact the state. The impact on import volumes and prices in Arizona will depend on which goods and which countries face tariff increases. Further, goods which are part of the shared production processes in North America (autos, etc) may face particularly drastic cost increases, since those parts often cross borders several times in the production process.
Mexico is Arizona’s most important international trading partner. In 2024, Arizona imported from Mexico goods valued at $11.6 billion. That accounted for 27.5% of state imports from the world (Exhibit 1). China was the next most import source at 12.7%, followed by Taiwan, Canada, and Japan.
Exhibit 1: Arizona Import Shares, Major Trading Partners as of 2024, Percent
One way to gauge the importance of imports to a state economy is to calculate imports as a share of GDP. As Exhibit 2 shows, in 2023, imports for Mexico amounted to 2.3% of state GDP. That ranked the state sixth in the nation, behind Michigan, Texas, Kentucky, Tennessee, and Alabama. GDP data is only available through 2023, so that is the most recent share we can calculate.
Exhibit 2: Commodity Imports from Mexico by U.S. State, 2023, Percent of GDP
We can drill down into the major industries importing from Mexico into Arizona. As Exhibit 3 shows, agricultural products was by far the largest sector, followed by computer and electronic products; electrical equipment, appliances, and components; transportation equipment; and machinery, except electrical.
Exhibit 3: Arizona Commodity Imports from Mexico in 2024, Top 10 NAICS Industries, $ Million
In addition, we can drill down into individual product categories. As Exhibit 4 shows, tomatoes were the most valuable import from Mexico last year, followed by peppers; wiring for vehicles; cucumbers; and imports of articles exported and returned, no change.
Exhibit 4: Top 10 Arizona Import Commodities from Mexico in 2024, Six-Digit HS Commodities, Dollars
Arizona exports to Mexico are an important part of the state economy. If countries facing increased U.S. tariffs respond with retaliatory tariffs, this will adversely impact state exporters.
In 2024, the state exported $9.0 billion in goods to Mexico. That was 27.8% of state exports to the world (Exhibit 5). Canada was Arizona’s next largest export destination, with 8.6% of state exports to the world, followed by the Netherlands, China, and the United Kingdom.
Exhibit 5: Arizona Export Shares, Major Trading Partners as of 2024, Percent
Be sure to track the latest monthly data on Arizona’s role in border trade on Arizona-Mexico Economic Indicators. There you will find the latest monthly data on Arizona imports and exports with Mexico and Canada, trade flows from Mexico to the U.S. through Arizona’s Border Ports of Entry, legal border crossings from Mexico to the U.S. through Arizona’s border ports, and more!
If your business or organization requires more timely and in-depth forecast data and analysis, find out about the benefits of joining EBRC’s Forecasting Project and email EBRC director George Hammond at ghammond@arizona.edu.
Author: George Hammond is director of the Eller Business Research Center. If your business or organization requires more timely and in-depth forecast data and analysis, find out about the benefits of joining EBRC’s Forecasting Project and email EBRC Hammond at ghammond@arizona.edu. Copyright 2025 Economic and Business Research Center, The University of Arizona, all rights reserved.
