BLOG — Apr 23, 2025
US States and Metro Economies That Rely Most on Export Activity
The Trump administration’s tariff policy could significantly alter trade flows in some parts of the country, although the extent of the shift depends on ongoing negotiations.
Areas that are heavily dependent on trade face increased risk in this environment. Destination and product specifics are also influential in measuring potential economic effects. However, all US states have experienced negative economic effects from the announcements of changes to tariff policies, including inflation concerns, reduced consumer confidence, and business and supply chain uncertainty, among others. Our analysis focuses specifically on state and metro exports, as they generate more direct economic activity than imports.
US merchandise export value is heavily concentrated in a few states. Texas leads at 22%, followed by California at 9%, with New York, Louisiana and Illinois each accounting for approximately 4%.
Texas has been the top exporting state for the past two decades, a position amplified by the resurgence in US oil production and the 2015 removal of the crude oil export ban. Louisiana is also on this list because it is a large exporter of oil and gas. In fact, oil and gas is the country’s leading export based on four-digit NAICS code, followed by aerospace products and parts, petroleum and coal, pharmaceuticals and medicines and motor vehicles.
Exports as a share of gross state product are also a key measure of the tariff effects, as they indicate trade’s relative importance to state economies. Louisiana and Texas lead this metric because of energy production and extensive downstream processing and export infrastructure along the Gulf Coast.
Kentucky, Indiana and South Carolina follow, driven primarily by aerospace and automotive exports, although Indiana has also seen a surge in pharmaceutical and medicine exports in the past two years. Oregon is the final state with a double-digit ratio, fueled by semiconductor shipments.
Export destinations vary significantly
The seven largest state exporters, which account for half of US merchandise value, send their exports to a mix of destinations. With trade negotiations ongoing, the results could vary greatly by location, and each state’s destination mix will significantly influence the impact of the tariffs on its economy.
Mainland China is a prominent example where export activity is under acute pressure. As of this writing, US tariffs on goods from mainland China stand at 145%, with mainland Chinese tariffs on US goods reaching 125%.
The significant increase in tariff rates, despite a 90-day pause on most other announced tariffs by the Trump administration, poses a major headwind to the US-mainland China trade relationship. Without a bilateral agreement, states with the highest export reliance on mainland China likely face the greatest downside risk.
One-third of US merchandise exports to mainland China originate from Texas, California and Washington. The next seven largest exporting states — Louisiana, North Carolina, Oregon, Indiana, Illinois, Kentucky and Alabama — export another 28%, totaling over 60% of US exports to mainland China.
The primary export categories are chemicals, computers and electronics, agricultural products, transportation equipment, and oil and gas. Major chemical exporters are Texas, North Carolina and Indiana; computers and electronics are key for California, New Mexico and Oregon; agriculture is key for Washington and Illinois; transportation equipment is key for Alabama, Kentucky and South Carolina; and oil and gas is key for Texas and Louisiana.
Top 25 US metro exporters
Similar to the top-heavy concentration at the state level, the top 25 US metro exporters account for half of the country’s merchandise trade, with the top six alone contributing about a quarter.
In 2023, Houston accounted for almost 9% of US exports, more than every US state except Texas and on a par with California. Texas is home to two of the three largest metro exporters, three of the six largest metro exporters, and five of the top 20 metro exporters.
Key metro specializations include Houston (oil, petroleum products and chemicals); New York City (miscellaneous manufacturing and nonferrous metals, which include high-value items like diamonds and gold); Corpus Christi (oil and gas); Los Angeles (aerospace, motor vehicles, pharmaceuticals and semiconductors); Chicago (pharmaceuticals and automotive); Dallas (aerospace, semiconductors and automotive); and Detroit (approximately half in motor vehicles and parts).
An uncertain path ahead
Going into 2025, state labor markets were showing signs of cooling, with our forecast pointing to a notable deceleration this year. The uncertainty and disruption caused by the tariff announcements have further reduced expected growth, which, along with cutbacks in federal employment, puts all states on a low-growth trajectory with an elevated risk of recession. Our April forecast projects a recession for Washington, DC; Virginia; and Maryland this year.
The magnitude of the tariff rates imposed by the US and reciprocal tariffs from other markets will influence inflationary pressures, trade flows and downside risks. Also, relative tariff rates across markets will affect the destination mix of the United States’ import and export partners in the coming months and years.
If Mexico becomes more advantaged in a new tariff regime, Texas, California and Michigan could benefit from their existing trading relationship. A more favorable relationship with Canada or Europe stands to be most impactful for the Midwest and Northeast. Exports to Asia are most concentrated along the West Coast and Midwest. State product mixes and the magnitude of exports relative to each state economy will also influence impacts.
This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.