The War Is Here. It’s Just Not Evenly Distributed.

by Chris Moyer

There is a tendency to treat war as something that belongs to foreign policy. It is discussed through maps, strategy, and diplomacy, as if its primary audience is in Washington. But war is also an economic event, and in the United States its effects are not evenly distributed. They concentrate in places tied to the physical economy. 

The war with Iran is now moving multiple global systems at once. Oil markets are reacting to instability in the Strait of Hormuz, which carries roughly 20 percent of the world’s petroleum supply. Defense spending expectations are shifting. Shipping routes are under pressure. And cyber activity tied to the conflict is already reaching into private-sector networks. 

If you want to understand what that looks like domestically, you start in a place like Michigan. 

Michigan still builds things, moves things, and grows things, which places it directly in the transmission path of shocks to energy, trade, and production. And those shocks are not moving in one direction.

Start with defense. Southeast Michigan, particularly Macomb County, has reemerged as part of the modern Arsenal of Democracy. The Detroit region accounts for more than 75 percent of Michigan’s Department of Defense contracting, and Macomb County alone saw roughly $25 billion in contracts over the past decade. If the conflict leads to sustained increases in defense spending, Michigan is positioned to benefit through advanced manufacturing and engineering. 

But that upside is partial. 

Energy is the more immediate force. Michigan gas prices are already in the mid-$3 range per gallon, and diesel, which matters more for freight and agriculture, has climbed above $5 nationally. Energy is not just a cost, it’s a multiplier. As fuel costs rise, transportation and input costs follow, compressing margins across industries. 

On the consumer side, the effect is just as direct. Higher fuel prices reduce discretionary income, and consumers delay large purchases first. In Michigan, that means vehicles. The auto industry is highly sensitive to fuel prices, interest rates, and consumer confidence. When all three become volatile at once, demand becomes harder to predict and production becomes riskier. 

Agriculture adds another layer. The Persian Gulf is not only central to oil markets; it is also a major source of fertilizer, accounting for roughly 49 percent of global urea exports and about 30 percent of ammonia exports. Those are essential inputs for modern farming. 

Michigan is one of the most agriculturally diverse states in the country, producing more than 350 million bushels of corn, over 100 million bushels of soybeans, and more than 12 billion pounds of milk annually. Farming is already a margin business. When fertilizer and fuel costs rise at the same time, those margins compress quickly. And farmers cannot wait out higher prices. They plant anyway, absorbing the cost. 

There is also a more modern layer of exposure. Stryker, a Michigan-based medical technology company with more than 56,000 employees and over $25 billion in annual revenue, reported that a cyberattack linked to an Iranian-affiliated group disrupted its global operations. The attack affected internal systems and forced the company to manage interruptions to manufacturing, order processing, and logistics. 

This is not an indirect effect of conflict. It is direct exposure. A company headquartered in Michigan became part of the conflict’s footprint through its digital infrastructure. 

Taken together, these forces clarify Michigan’s position in the modern economy. The state is deeply integrated into the systems that global conflict disrupts, including defense production, energy markets, industrial supply chains, agriculture, and digital networks. That integration creates opportunity in some sectors, particularly defense, but it also creates broad exposure across the rest of the economy. 

These effects do not cancel each other out. They accumulate. 

For years, there has been an assumption that globalization would insulate the United States from the economic shocks of distant conflict. What this moment shows is something closer to the opposite. Globalization did not eliminate those shocks. It made them more immediate and harder to contain. 

And in a state like Michigan, those shocks do not arrive as distant signals. 

They show up in costs, demand, and operations.