What the last 30 years can tell us

With headlines buzzing about new tariffs, it's normal to wonder how much each state depends on international trade. More broadly, how tied is the U.S. economy, state by state, to the flow of goods coming in and out of the country? While it's too early to assess the impact of the latest trade developments, this is a good time to take a step back and look at the big picture. 

Tariffs are set at the national level and apply uniformly. However, even though trade policies are made in Washington, D.C., their effects reach much closer to home and do not impact all states equally. Some states have built their economies around global exports: shipping cars, chemicals, or electronics to buyers worldwide. Others import massive amounts of goods, such as car parts, that feed into local industries and supply chains. For example, Texas exports a significant amount of oil and gas, while Michigan is closely tied to auto manufacturing. Meanwhile, states often have different key trading partners. Texas and Arizona are heavily integrated with Mexico, while the West Coast engages in more trade with Asia. Thus, understanding which states are most reliant on trade can help explain everything from warehouse demand and factory job growth to how sensitive an area might be to supply disruptions or price changes. 

To explore this, we examined each state's exports and imports relative to its gross domestic product (GDP). Let's take a look at what we found, which may surprise you.

Which States Rely Most on Exports?

When we discuss exports, we refer to the goods that states produce and sell to international buyers. We compared exports to the state's total GDP to gauge how important exports are to a state's economy. Here are the states that stand out:

  • Louisiana leads the nation with 26.5% of its state GDP coming from exports. The state's energy and chemical industries drive this activity, with massive quantities shipped through its ports to top partners, with China, Mexico, and the Netherlands each receiving more than $5 billion in Louisiana products, for example.
  • Texas follows at 16.8%, exporting primarily its oil, gas, chemicals, and tech products. With strong infrastructure and international connections, Texas is a major export hub. Its top partners include Mexico, Canada, and the Netherlands, with export values exceeding $30 billion for each of these countries.
  • Kentucky is close behind at 16.3%. It might surprise some, but Kentucky exports a significant number of cars and aerospace parts. Major companies such as Toyota and GE Aviation operate there. The primary partners are Canada, the U.K., and France, with over $4.5 billion in exports to each country.
  • Indiana (11.4%), South Carolina (10.9%), Oregon (10.3%), and Michigan (8.7%) also have strong export profiles, specializing in pharmaceuticals, car parts, semiconductors, and more. 

On the other hand, large states like New York (4.0%), Florida (4.2%), and California (4.5%) rank lower on the export spectrum—not because of a lack of global influence, but due to their economies being driven more by services in finance, tourism, and entertainment.

Now let's discuss imports.

Which States Rely Most on Imports?

Imports are somewhat different. They include goods coming into the country, ranging from car parts to consumer electronics and machinery. Imports aren't technically counted as part of GDP; they are actually subtracted from the formula used to estimate GDP. However, comparing imports to state GDP can provide insight into how much a state relies on foreign goods for its economy.

So, which states are bringing in the most?

  • Kentucky again stands out, with imports equal to 32.3% of its GDP. That's a significantly higher share compared to other states and reflects the state's deep integration into the global market—especially in pharmaceuticals and automotive industries. Its top import partners are Mexico, Japan, and Taiwan.
  • Michigan (24.5%) and Indiana (20.2%) follow in the Midwest. These states also highlight how essential imported parts are for car production and industrial output.
  • Tennessee (21.9%) and Georgia (16.5%) are right up there too, both serving as major logistics and distribution hubs.
  • Illinois (19.2%), New Jersey (18.1%), and South Carolina (16.6%) closely follow, importing oil, communications equipment, pharmaceuticals, and chemicals from a variety of international partners.

Conversely, more rural or service-driven states like South Dakota (2.2%), Nebraska (3.2%), and Wyoming (3.9%) exhibit significantly lower import-to-GDP ratios, indicating a greater reliance on domestic production and local demand.

States That Rely on Both Imports and Exports

Some states appear on both lists, marking them as real trade powerhouses. These economies are deeply integrated into global supply chains on both ends:

  • Kentucky – #1 in imports, #3 in exports. With robust manufacturing logistics, the state has become a key player in facilitating the movement of goods across borders.
  • Texas – #2 in exports, #9 in imports. This is largely attributed to oil, technology, and its strategic position along the U.S.-Mexico border.
  • Indiana, Michigan, and South Carolina also prominently feature in both categories.

As a result, these states are more likely to experience the ripple effects of global supply chain shifts, both positive and negative. A surge in global demand supports their growth, while disruptions, such as factory shutdowns overseas or sudden tariffs, can present challenges as well.

Why This Matters Beyond Trade Policy

Why does this matter if I am not in manufacturing or logistics? The short answer is that trade impacts much more than just exports and imports. Here's how:

Labor Market

First, in the labor market, thousands of jobs – both directly and indirectly – are tied to global business. However, data indicate that the employment effects of trade policies are multifaceted and vary significantly across states, influenced by each state's economic composition and the specific industries present. That said, while trade-dependent states like Texas and Michigan may experience more pronounced fluctuations in their job markets in response to trade policy changes, less trade-reliant states may see more stable employment. Data reveals that since 1994, when the North American Free Trade Agreement (NAFTA) came into effect, states with lower trade reliance have actually experienced stronger job growth. Contrary to expectations, low trade-reliant states, where exports accounted for less than 7% of GDP, saw an average job growth of 39%. High trade-reliant states lagged behind, with an average job growth of 32%. Specifically, states like Nevada (113%), Utah (102%), and Arizona (91%) doubled their jobs since 1994, despite having relatively modest trade footprints. Texas was the only high-trade state to make it into the top 10 for job growth, adding 81% more jobs over the last three decades. 

Housing Market 

A similar pattern emerges in housing markets. Home prices have increased more rapidly in states that were less reliant on trade. Low trade-reliant states experienced an average home price rise of 291%, while high trade-reliant states lagged behind with an average of 237%. Notably, states like Florida (406% home price rise), Washington (379%), and Colorado (377%), which have more modest export footprints, saw the most significant housing appreciation.

People and income ultimately drive housing markets. The states that led in home price growth were often those with rapid job growth in tech and services, high levels of domestic migration, and limited housing supply or zoning constraints. Meanwhile, states with smaller export shares are less vulnerable to global supply chain disruptions and often attract knowledge economy jobs or retirees, boosting housing demand in urban and suburban areas. There's no doubt that trade created winners—regions like Dallas, Houston, Charleston, and Phoenix developed as major logistics hubs. However, the broader data suggests that trade alone wasn't sufficient to elevate housing markets consistently.

If the last 30 years have taught us anything, it is that the housing market thrives where people want to live and work, not merely where goods are produced or shipped.