What does it take for a state to attract businesses and jobs in 2025? President Trump has turned many states’ well-worn economic development playbooks upside down.

As the administration seeks to drastically cut the size of the federal government, states that previously could count on Washington for federal jobs, grants and contracting dollars are suddenly out of luck. Meanwhile, the states that are less reliant on the federal government are looking smart.

And then there are the tariffs. Some states have built large parts of their economies on international trade, which the Trump trade war is disrupting.

“Something affecting one country or one product might really hurt the companies in one state, and the state next door would be unaffected,” said Dan Anthony, president of Trade Partnership Worldwide, a Washington, D.C.-based economic research firm.

But all those changes are also creating new opportunities, said Tom Stringer, a principal and the leader of the site selection and incentives practice at Grassi Advisors in New York. “For myself and my colleagues, this has been one of the busiest periods that we’ve had in our 30 year careers, which is exciting,” he said.

Stringer said that he is already working with foreign companies that are seeking to establish manufacturing operations in the U.S. to avoid the tariffs, even though the ultimate makeup of the tariffs has yet to be determined.

“Businesses crave certainty,” he said. “I think it’s fair to say that none of us, except for one person, really has any knowledge as to where the tariffs are going to go or finish up. And so, the way to deal with that has been to strategically start to place some capacity here in the U.S.”

Domestic companies are on the move, too, he said, especially in burgeoning industries like artificial intelligence, quantum computing and the rapidly changing and growing defense sector.

Which states have the edge in this new environment? America’s Top States for Business is back to find out.

The exclusive CNBC study, now in its 19th year, rates all 50 states in ten categories of competitiveness. From the start, we designed our tried-and-true methodology to account for the rapidly changing nature of economic development, placing the heaviest weight on the factors that matter most to business from year to year.

In 2025, the category that matters most is Economy. State economic development marketers are touting their state’s economic strength and stability more than ever, in the face of recession fears.

New economic risk factors

This year, in addition to traditional metrics impacting the Economy category, such as economic growth, job growth, and state finances, we are also factoring in the risks each state faces from the many changes coming via policies from Washington, D.C., including budget cuts and tariffs.

That impact is being felt much differently across the states.

“You look at a state like Kentucky, its goods trade. Exports and imports are about 50% of its GDP. It’s the highest in the country,” Anthony said. “Contrast that with a state like Virginia, where it’s less than 10%.”