Houston Primed To Withstand Downturn Thanks To 'Tangible' Onshoring, New International Trade
Amid a trade war and spiking tariffs, Houston’s position as an international hub is set to benefit the economy more than hurt it — at least for now.
Port Houston’s efficient operations, international trading relationships and several new onshoring investments will help Houston weather economic turbulence that could be just ahead, Greater Houston Partnership President and CEO Steve Kean said at GHP’s State of Houston’s Worldwide Economy event late last week.
A new GHP report revealed that Houston was the top U.S. metro for overall exports in 2024, and it has diversified its primary trading partners as trade with China has grown more difficult. And while Trump administration tariffs are increasing costs of construction materials and consumer goods, they are also driving companies to domesticate their manufacturing.
Since Trump’s inauguration, companies including Apple, Nvidia and Tesla have announced plans for large-scale manufacturing facilities in the Houston region.
“We are an attractive destination for onshoring operations and investment, and we're taking full advantage of that as a community,” Kean said. “This is not theoretical. We have tangible announcements of this onshoring activity.”
Kean said the companies chose their locations because of Houston’s port and logistics assets as well as its large and growing workforce, among other factors that could buoy it through tougher times.
“We’re uniquely positioned to weather these changes,” he said.
Meanwhile, Houston has already diversified its international trade so that China — President Donald Trump’s No. 1 target for the trade war, with 145% import tariffs — is no longer its top trading partner after four years in that spot.
China remains an important trade partner, especially for industrial equipment, electronics and raw materials for manufacturers, said Craig Rhodes, GHP executive vice president of economic development. But China was bumped to second on the list of countries Houston trades with last year.
“Exports to China were down 14% overall, especially in areas of oil, plastics and other petrochemical products,” Rhodes said.
“That decline will likely accelerate this year as we see some of the supply chain friction and other global, macro things taking place in the global economy,” he added.
The Netherlands jumped from third to first as the region’s top trading partner in 2024, rising 23% from 2023. Crude oil and refined products accounted for 83% of Houston's total trade with the Netherlands, according to a GHP presentation.
This is somewhat attributable to geopolitics as Europe diversified its oil resources away from Russia amid the war with Ukraine, Rhodes said.
“Port Rotterdam became really the key gateway entry point into Europe for a lot of the oil products coming out of the Houston region, which helped drive some of that,” he said.
Houston’s $181B worth of exports in 2024 was up 3% from the previous year. While energy companies have made transition and diversification a priority in recent years, oil and petrochemical products remain a significant export from Port Houston.
The Trump administration also has a policy goal of “unleashing American energy.”
Over the past 15 years, oil exports climbed from 13% to nearly 46% of the total trade for the Houston region. Oil and refined petroleum products account for more than half of all trade value flowing through the Houston-Galveston Customs District in 2024, Rhodes said.
