By Joe Petrowski

As we know, prosperity and misery never falls equally on countries, states or individuals. So it is with coronavirus and China’s economic struggles. While the spread of the disease in the United States is still developing (and will likely have at least short-term ramifications of their own), conditions in China are becoming clearer. The US states most vulnerable to trade and other disruptions related to the disease China are:

  • Tennessee—China represents 8% of state’s GDP.
  • California—6% of state GDP is China related and it is also and it is the destination for 75% of Chinese tourists.
  • Washington—China also represents 6% of the state’s GDP.
  • South Carolina—China represents 5% of the state’s GDP.

Texas and Illinois have significant exposure to China, but not as high a percentage of their GDP given their diverse and stronger economies

Certain industries like auto and machinery parts in Michigan, Indiana, Kentucky and Ohio could be seriously affected by a prolonged retraction in China. Oregon and Massachusetts have several high tech and computer industries with significant Chinese exposure.

One interesting industry in the U.S. that has benefited from China’s difficulty is the hockey stick manufacturing business, where 55% of hockey equipment is manufactured in China. A U.S. company in Michigan is filling the void.

Everyone, of course, is hoping for a quick resolution on this virus, and history has taught us that our global medical community is outstanding. But in the interim, there will be pain for many beyond the symptoms of the disease itself.

 

Joe Petrowski has had a long career in international commodity trading, energy and retail management and public policy development. He currently serves as the fuel director of Yesway convenience stores and an adviser to their Chairman on Operations and Merchandising, as well as a director of Xebec, a Canadian manufacturer of Clean technology and Green Print, a carbon mitigation firm. Petrowski previously served as the president and CEO of Gulf Oil LP and was elected to the Gulf Oil LP Board of Directors and then as CEO of the now combined Gulf Oil and Cumberland Farms. He is Managing Director of Mercantor Partners, a private equity firm investing in convenience and energy distribution.