In an earlier post we discussed Texas’s role as an export powerhouse within the U.S. with just over 22% of the total national value of exported goods and services in 2023 coming from the Lone Star state. Here, we discuss the final export destinations of Texas’ top exported goods and evaluate Texas’ trade relationship with Mexico.
In 2023, Texas exported $445 billion of goods and services. Of those exports, the Oil and Gas Industry occupied the largest share at 31% of the export value last year. About 65% of the exports from Texas are from the manufacturing sector with the Petroleum Product Industry occupying 15% of the state’s total exports. The other major manufacturing exports are chemicals at 13%, computer and electronic products at 12%, and transportation equipment at 6%.
Figure 1 shows the top five export destinations of these goods and services with their percentage of shares of trade with Texas in 2023. Mexico ranked first with 29.13%, followed by Canada at 8.07%. The Netherlands ranked third at 5.98%, followed closely by China at 5.95%, while South Korea ranked fifth at 4.74% of shares of trade. Last year, the top export to Canada, Netherlands, China and South Korea was oil and gas with a share of 24%, 74%, 44% and 65% of all commodities exported from Texas.
Figure 1. Top 5 Export Destinations of Texas, 2023
Source: USA Trade Online
Our southern neighbor, Mexico, is by far Texas’s largest export partner. Texas shares a 1,254 mile border with Mexico with 28 international bridges and border crossings. Figure 2 below shows the trend of the exports from Texas and the rest of the U.S to Mexico from 2006 to 2023. The exports from Texas to Mexico increased by 136% in dollar volumes over this period. Meanwhile, exports from the rest of the US to Mexico increased by a similar but somewhat higher amount, 145%.
Figure 2. Trend of Exports to Mexico from Texas and Rest of U.S., 2006-2023
Of the total dollar volume of the exports from Texas to Mexico in 2023, 92% is from the manufacturing sector in which the petroleum industry (mainly refined Petroleum and Coal Products,oil derivatives) tops the list with $30.6B dollars, a share of 44% of the total petroleum product industry export value from Texas. The remaining 56% of the Texas petroleum products are exported to South/Central America and to Europe.
Figure 3 displays the top five export products from Texas to Mexico. After the Petroleum and Coal Product Industry, Computer and Electronic Product Industry follows next in exports with $25B dollars, a share of 19% of the total export value from Texas to Mexico. The Chemicals Industry shares 10% of the total export value, while Transportation Equipment Industry shares 8% of the total exports to Mexico. The fifth highest export from Texas to Mexico is the Electrical Equipment, Appliances and Components industry at 7%. These five industries combined together share 74% of all exports to Mexico. The remaining 26% is shared by other manufacturing industries like Machinery, Metal manufacturing among others, and Oil and Gas Industry.
Figure 3. Top 5 Exports from Texas to Mexico, 2023 (U.S. $)
As trade occurs in both directions, what were Mexico’s top imports to Texas in 2023? The top three exports (in dollar volumes[1]) from Mexico to Texas are from the manufacturing industry. The Transportation Equipment Industry took the lead with 26% of the total import by Texas from Mexico, followed by Computer and Electronic Products at 24% and Electrical Equipment, Appliances and Components at 9%.
Between the two, Texas is the overall net importer of goods from Mexico with a $13.2 billion negative trade balance in 2023. The trade balance of the top industries in the trade flow between Texas and Mexico in 2023 is depicted in Figure 4. Petroleum Product and Chemicals Industries reported a positive trade balance of $28B and $10B, respectively, with Mexico. The Oil And Gas industry had a negative balance of $2.7B. The heavily traded Computer and Electronic Products, Electrical Equipment and Appliances, and Transportation Equipment Industries reported negative trade balances of $9B, $4B and $27B, respectively, leading to trade deficits with Mexico.
Figure 4. Trade Balance of Top 5 Exports and Imports of Texas, 2023
Texas, as the largest exporting state, exported mainly petroleum and coal products, computer and electronics, and chemical products to its trade partners worldwide, but Mexico is Texas’s largest single export partner. Almost a third of Texas’s total shares of trade were with Mexico in 2023. Petroleum and Coal products were the main export from Texas to Mexico, worth $30.6B. Although exports from Texas to Mexico have been trending up in recent years, Texas is the overall net importer of goods from Mexico with a $13.2 billion negative trade balance last year.
Texas may be the net importer of goods and services from Mexico, but it is a net exporter with the world. In 2023 Texas reported a $62.5 billion worth of trade surplus with the majority of the positive trade balance originating from the Oil and Gas industry.
Endnotes
[1] Customs Value –”The value of goods imported as appraised by the U.S. Customs and Border Protection. This value is generally defined as the price actually paid or payable for merchandise when sold for exportation to the U.S. It excludes U.S. import duties, freight, insurance, and other charges incurred in bringing the merchandise to the U.S. (General Imports)” (Source: USA Trade Online)