Kentucky's international trade profile is being reshaped by a booming aerospace sector, with the state exporting $47.9 billion in goods in 2024 while simultaneously reducing its economic dependence on Chinese imports, according to analysis from the Federal Reserve Bank of Cleveland published on The Lane Report.

Transportation equipment accounted for more than half of Kentucky's 2024 exports, with aerospace products and parts comprising nearly three-quarters of that category, according to the Cleveland Fed's Kentucky International Trade Relationships report. The state exported approximately $25.59 billion in transportation equipment, including $18.94 billion in aerospace products and parts. This aerospace growth has been transformative: Kentucky's transportation equipment exports more than doubled since 2013, driven primarily by the sector's expansion.

The aerospace industry has become central to Kentucky's manufacturing economy. The state is home to more than 100 aerospace-related facilities employing over 23,000 people, according to the Kentucky Cabinet for Economic Development. Since 2020, the commonwealth has announced more than 50 aerospace-related projects totaling $738 billion in investment and creating over 2,000 jobs. Recent projects include Aerospace Composites Solutions' $16.8 million facility in Butler County and Nitto's $220-job production facility in Frankfort.

The European Union and Canada remain Kentucky's largest export destinations, accounting for more than 40 percent of exports in 2024, with aerospace products and parts representing 46 percent of exports to the European Union and nearly 74 percent to the United Kingdom.

Meanwhile, China's share of Kentucky imports has plummeted from 24.4 percent in 2010 to just over 7 percent in 2024. The European Union has emerged as the state's largest import source, accounting for 31.4 percent of imported goods, with approximately one-quarter of European imports originating from Ireland. This shift reflects changing global supply chains and manufacturing dynamics affecting Kentucky businesses.

Kentucky remained a net importer in 2024, with imports of $94.5 billion nearly doubling exports. Chemicals represented the largest import category at $35.6 billion, with pharmaceuticals and medicines comprising about $34 billion of that total. Computer and electronic products ranked second at $16.6 billion in imports.

The diversification of Kentucky's trade relationships underscores the state's growing integration into global markets and its dependence on international demand. Changes in tariffs, exchange rates or trade policy could significantly impact Kentucky manufacturers and employers across multiple sectors.