Impact of Trade on U.S. States’ Economies

This analysis examines the trade activities of U.S. states—including exports and imports—against their gross domestic product (GDP), illustrating the significant influence of global commerce in various regions.

Key Export Leaders: Energy, Automotive, and Aerospace

Louisiana leads the nation in export intensity, with 26.5% of its GDP attributable to goods sold abroad. The state’s robust energy and chemical industries contribute to billions of dollars in exports, primarily crude oil and refined petroleum, facilitated by its Gulf Coast ports.

Major importers of Louisiana’s goods include China, Mexico, and the Netherlands, each receiving over $5 billion in exports from the state.

Texas, another dominant player in exports, has 16.8% of its GDP linked to its export activities. Its trade portfolio prominently features oil, gas, and technology products, with substantial exports surpassing $30 billion each to neighboring Mexico, Canada, and the Netherlands.

Kentucky ranks third with 16.3% of its GDP tied to exports, largely driven by its auto and aerospace manufacturing sectors. Major companies, such as Toyota and GE Aviation, anchor this export strength, with significant markets in Canada, France, and the United Kingdom.

Sother high-export states include Indiana, South Carolina, Oregon, and Michigan, each showcasing robust industries such as semiconductors and pharmaceuticals. Conversely, large states like New York, Florida, and California report relatively low export-to-GDP ratios around 4%, primarily due to their service-oriented economies focused on finance, entertainment, and tourism.

Import Dynamics: Manufacturing States in Focus

Kentucky tops the import rankings with 32.3% of its GDP linked to imports, indicating a high level of global integration within the auto and pharmaceutical supply chains. Notable trade partners include Japan, Mexico, and Taiwan.

Michigan and Indiana also have significant reliance on imports, with figures at 24.5% and 20.2% of their GDPs respectively. This dependence is fueled by the necessity of globally sourced parts for their auto manufacturing industries. Following them are Tennessee and Georgia, which function as major distribution centers for goods arriving in the Southeastern United States.

“States like Michigan and Kentucky are deeply embedded in global supply chains,” said Evangelou. “When overseas factories shut down or tariffs spike, these states feel the shock almost immediately.”

In contrast, rural states, including South Dakota, Nebraska, and Wyoming, show minimal import activities, suggesting economies that are more self-sufficient.

Trade’s Influence on Housing Market Growth

States such as Kentucky, Texas, Indiana, and South Carolina are notably reliant on import and export activities. This reliance positions their economies as highly sensitive to changes in global supply chains, benefiting from international demand while risking exposure to global disruptions.

“These states are the most exposed to trade policy volatility,” Evangelou noted. “A strong global economy helps them grow fast, but any hiccup — like new tariffs — can hurt just as quickly.”

Interestingly, a strong trade relationship does not necessarily correlate with job or housing market growth. According to the National Association of Realtors (NAR), states less dependent on trade—where exports account for less than 7% of their GDP—have seen greater job growth since the North American Free Trade Agreement (NAFTA) took effect in 1994.

Over the last three decades, low-trade states have observed an average job growth of 39%, compared to a 32% increase in high-trade states. Notably, Nevada, Utah, and Arizona have all more than doubled their job bases, despite their modest trade volumes.

Texas, the exception among high-trade states, ranked in the top 10 for job growth, adding an impressive 81% more jobs during this time.

A similar trend is visible in the real estate sector. Low-trade states recorded a 291% increase in home values since 1994, surpassing the 237% increase seen in high-trade states. Florida (+406%), Washington (+379%), and Colorado (+377%) are prime examples of states with significant home-price appreciation driven by technology, services, and domestic migration rather than export-oriented manufacturing.

“Trade hubs like Houston and Charleston definitely benefited from global commerce,” Evangelou added. “But long-term housing demand is driven more by people, not just products.”