Analysis of State Trade Activities in Relation to GDP

This analysis examines the trade dynamics—both exports and imports—across various states, providing insight into how international commerce correlates with each state’s gross domestic product (GDP).

Top Exporting States: Energy, Automotive, and Aerospace Sectors

Leading the nation in export intensity, Louisiana has 26.5% of its GDP linked to international sales. The state’s thriving energy and chemical industries export billions in crude oil and refined products via its ports along the Gulf Coast.

Major import partners for Louisiana include China, Mexico, and the Netherlands, each purchasing over $5 billion in goods annually.

Texas ranks as a significant exporter, with 16.8% of its GDP reliant on international trade. The state’s exports include oil, gas, and various technological products, with over $30 billion shipped to Mexico, Canada, and the Netherlands due to its extensive infrastructure.

Placing third, Kentucky has an export-to-GDP ratio of 16.3%, driven largely by its strong presence in the automotive and aerospace manufacturing sectors, primarily through companies like Toyota and GE Aviation. Canada, France, and the United Kingdom are primary markets for Kentucky’s exports.

Other states with notable export activities include Indiana, South Carolina, Oregon, and Michigan, characterized by flourishing industries ranging from semiconductors to pharmaceuticals.

In contrast, major economies such as New York, Florida, and California exhibit lower export-to-GDP ratios, around 4%, attributed to their heavier reliance on service-oriented sectors like finance, entertainment, and tourism.

Key States in Import Activities

When it comes to imports, Kentucky leads as imports constitute 32.3% of its GDP, a reflection of its integration within global supply chains for automotive and pharmaceuticals. The top trading partners for Kentucky include Japan, Mexico, and Taiwan.

Michigan and Indiana also have high import reliance, with 24.5% and 20.2% of their GDPs allocated to imports respectively, primarily due to their needs for automotive manufacturing supplies sourced from around the world. Nearby, Tennessee and Georgia play vital roles as distribution hubs catering to Southeastern port activities.

“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.”

Conversely, less populated states such as South Dakota, Nebraska, and Wyoming exhibit minimal import activities, indicating economies that are more self-reliant.

Impact on Housing Market Growth

As states like Kentucky, Texas, Indiana, and South Carolina dominate in trade reliance, their economies are acutely responsive to shifts in global supply chains. While international demand provides growth opportunities, these states are also at risk of global economic disruptions.

“These states are the most exposed to trade policy volatility,” noted Evangelou. “While a strong global economy supports growth, any disturbances, such as new tariffs, can have swift repercussions.”

Interestingly, a reliance on trade does not always equate to robust job or housing market growth. According to the National Association of Realtors (NAR), states less dependent on trade—where exports comprise less than 7% of GDP—have consistently outpaced their trade-heavy counterparts in job creation since the North American Free Trade Agreement (NAFTA) was enacted in 1994.

• Low-trade states have experienced an average job growth rate of 39% over three decades.
• Comparatively, high-trade states saw job growth of 32% during the same period.

Notably, states like Nevada, Utah, and Arizona have more than doubled their job bases despite comparatively modest trade activities. Texas maintained a unique position as the only highly trade-reliant state to rank in the top 10 for job growth, increasing jobs by 81%.

The trend is similarly reflected in the real estate sector, where low-trade states enjoyed a 291% increase in home prices since 1994, surpassing the 237% increase observed in high-trade states.

States experiencing significant home-price appreciation include Florida (+406%), Washington (+379%), and Colorado (+377%), further emphasizing growth driven by technology, services, and domestic migration rather than export-based manufacturing.

“While trade hubs like Houston and Charleston have undoubtedly gained from global commerce,” Evangelou remarked, “long-term housing demand is influenced more by population dynamics than merely trade.”