How Important Is International Trade To Each U.S. State's Economy? Pretty Important For Most U.S. States

Mark J. Perry profile picture
Mark J. Perry

How important was international trade for each US state's economy in 2017? The map and table above help to answer that question. The table above shows GDP for each US state (data here) in 2017 (based on an average of the second and third quarter figures, data for Q4 aren't yet available), the total trade volume (exports + imports, data here for merchandise trade only, data on trade in services aren't available by state) last year, and the volume of international trade activities as a share of each state's GDP, ranked from highest to lowest. Ignoring the District of Columbia, the average trade share of GDP for US states in 2017 was 17.2% (up from 16.7% in 2016), and ranged from a low of 5% for South Dakota to a high of 39% for Michigan. The trade shares by state are also displayed graphically in the map above - the greater the share of state trade activities (exports + imports) in relation to state GDP, the darker the shade of blue.

Following No. 1 Michigan as America's most globalized state, the states with the next highest trade shares in 2017 were Louisiana (38.7%), Kentucky (38.1%), Tennessee (32.6%), South Carolina (31.9%), Texas (31.2%) and Indiana (25.7%). Overall, the trade share of GDP was 20% or higher in one-third (17) of states last year, 25% or higher in ten US states, and 30% or higher in six states.

Here are some thoughts on the US states with the highest international trade shares in 2017, and the policy implications of those trade shares:

1. Michigan. The auto industry clearly explains the importance of international trade to the US state economy that is the most highly globalized. Michigan's auto-related exports represented the top seven state export categories in 2017 and 15 of the

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Mark J. Perry profile picture
Dr. Mark J. Perry is a full professor of economics at the Flint campus of The University of Michigan, where he has taught undergraduate and graduate courses in economics and finance since 1996. Starting in the fall of 2009, Perry has also held a joint appointment as a scholar at The American Enterprise Institute. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University and in addition, and has an MBA degree in finance from The University of Minnesota. In addition to an active scholarly research agenda, Perry enjoys writing op-eds for a general audience on current economic issues and his opinion pieces have appeared in most major newspapers around the country, including USA Today, Wall Street Journal, Washington Post, Investor’s Business Daily, The Hill, Washington Examiner, Dallas Morning News, Sacramento Bee, Saint Paul Pioneer Press, Miami Herald, Pittsburgh Tribune-Review, Detroit News, Detroit Free Press and many others. Mark Perry has been best known in recent years as the creator and editor of one of the nation’s most popular economics blogs, Carpe Diem. Professor Perry has written on a daily basis since the fall of 2006 to share his thoughts, opinions and expertise on economic issues, with a strong emphasis on displaying economic data in a visually appealing way using graphs, charts and tables.

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