Colorado Export Growth Masks Sharp Decline in Trade with China

In the first five months of 2025, Colorado’s exporters achieved an encouraging milestone: total goods exports rose 10.5% compared to the same period in 2024, reaching an estimated $4.84 billion in value. On the surface, the numbers suggest a robust and growing trade economy, driven by strong demand from North American and European partners.

Yet a closer look at the data reveals a more complicated picture. Trade with China — once one of Colorado’s most promising export destinations — has fallen dramatically, with shipments dropping 30% year-to-date. In February alone, the decline hit a staggering 37.6% compared to the previous year, according to Colorado Sun reports based on U.S. Census Bureau data.

For exporters in Colorado and Wyoming — from aerospace manufacturers to agricultural producers — this divergence between total export growth and declining Chinese trade presents both challenges and opportunities.

Colorado’s export profile is diverse, encompassing high-value sectors such as:

• Aerospace components and advanced manufacturing parts
• Industrial machinery
• Agricultural products including beef, grains, and dairy
• Beverages such as craft beer and distilled spirits

The state’s geographic location — landlocked but strategically connected by rail, road, and air freight hubs — allows it to serve both domestic distribution networks and international ports efficiently.

In early 2025, trade with Canada and Mexico surged, buoyed by the ongoing stability of the United States–Mexico–Canada Agreement (USMCA). Exports to Canada grew in part due to increased demand for renewable energy components and construction machinery, while Mexico’s imports of Colorado agricultural products saw double-digit growth.

Europe, too, emerged as a strong market. Germany and the Netherlands increased their purchases of industrial equipment and specialty foods, benefiting from favorable exchange rates and shifting supply chains in response to geopolitical tensions elsewhere.

China has long been one of Colorado’s top trading partners, particularly in the aerospace, medical equipment, and agricultural sectors. For example, Colorado beef exports to China had been growing steadily in recent years after the market reopened in 2020.

But the start of 2025 brought fresh headwinds:

1. Tariff reimposition by the United States on key Chinese goods, aimed at correcting perceived trade imbalances.
2. Retaliatory tariffs from Beijing on American agricultural and industrial goods.
3. Continued logistical bottlenecks at Pacific ports and increased freight costs.

As a result, even competitive Colorado products have become less attractive in the Chinese market. Higher costs, longer lead times, and uncertainty about future tariffs have prompted Chinese buyers to seek alternative suppliers in countries like Australia, Brazil, and within the EU.

According to Axios Denver, these trade disruptions could have lasting impacts on Colorado’s economy if diversification strategies aren’t accelerated.

Aerospace and Advanced Manufacturing
Colorado is home to a thriving aerospace industry, with companies producing satellite components, navigation systems, and defense-related technologies. Many of these products have niche global demand, but Chinese buyers have historically been important customers for certain non-defense components. The recent trade tensions have reduced orders, pushing firms to look toward European and Middle Eastern markets.

Agriculture
From cattle ranches in the Eastern Plains to wheat fields in the Arkansas Valley, agriculture is a cornerstone of Colorado’s export economy. China’s tariffs on U.S. beef and grains have hit producers hard. Some ranchers have pivoted to selling more into South Korea, Japan, and domestic high-end markets, but the sudden loss of Chinese volume is still being felt.

Mining and Natural Resources
While Colorado is not a major exporter of rare earths, neighbouring Wyoming has significant deposits and an emerging industry. The broader U.S.-China trade tensions have implications for resource markets too, as China dominates global rare-earth processing capacity.

The same policy shifts hurting trade with China have opened doors elsewhere. Under USMCA, Colorado exporters enjoy tariff-free access to Canadian and Mexican markets, making these countries natural first choices for expansion.

Mexico has been buying more U.S. dairy products, feed grains, and machinery. Canada, meanwhile, has been an important buyer of renewable energy technology and industrial parts manufactured in Colorado.

European trade is also benefitting from a “China+1” sourcing strategy — European firms are diversifying their suppliers to reduce dependency on China, and Colorado’s high-quality manufacturing and agricultural sectors are well-positioned to fill the gap.

Economists and trade analysts agree that the current environment demands adaptability.

“Colorado businesses are resilient,” said Chris Stiffler, an economist at the Colorado Fiscal Institute, in an interview with Axios. “But higher costs and uncertainty around trade policy can erode competitiveness, especially in industries like aerospace where global supply chains are tight.”

Business leaders are echoing that sentiment, noting that maintaining flexibility in sourcing, pricing, and market targeting will be crucial for 2025 and beyond.

For exporters in Colorado and Wyoming, the key takeaway from the first half of 2025 is that market concentration risk is real. Heavy reliance on a single major buyer like China can expose companies to sudden shocks. The following strategies could help mitigate these risks:

1. 1. Market Diversification
      • Expand presence in Southeast Asian markets such as Vietnam, Malaysia, and Indonesia.
      • Explore emerging opportunities in Africa, particularly in agriculture and renewable energy equipment.
        
        
   2. Leverage Trade Assistance Programs
      • The U.S. Commercial Service and state export programs offer matchmaking, grants for trade show participation, and assistance with compliance requirements.
        
        
   3. Strengthen Supply Chain Resilience
      
      • Develop relationships with multiple suppliers and logistics providers to manage disruptions more effectively.
        
        
   4. Invest in Branding and Value-Added Products
      
      • Differentiating through premium quality, sustainability certifications, and unique branding can justify higher prices in competitive markets.

The 10.5% growth in Colorado’s exports so far in 2025 is a testament to the adaptability and entrepreneurial spirit of the state’s businesses. However, the steep drop in trade with China is a reminder that the global marketplace is complex and sometimes unpredictable.

For the Rocky Mountain District, the next chapter will likely involve balancing short-term opportunities in nearby and politically stable markets with long-term strategies for reengaging with China and other high-potential partners when conditions improve.

As global trade patterns shift, the exporters who will thrive are those who stay informed, flexible, and proactive in adjusting their strategies to the ever-changing rules of international commerce.

• Colorado Sun – July 19, 2025
  https://coloradosun.com/2025/07/19/colorado-global-exports-imports-tariff
• Colorado Sun – May 3, 2025
  https://coloradosun.com/2025/05/03/colorado-trade-china-imports-exports
• Axios Denver – April 4, 2025
  https://www.axios.com/local/denver/2025/04/04/trump-tariffs-impact-colorado-economy
• U.S. Census Bureau Trade Data