Imports are the largest contributor to the U.S. economy, according to new research, underscoring how rising global trade tensions and tariffs could pose risks to future growth.
A new study by demand-planning software company Algo finds that imports generate more economic output than any other U.S. industry, contributing an estimated $3.85 trillion to gross domestic product. The findings come as President Donald Trump recently raised tariffs on South Korean goods to 25 percent, intensifying concerns about the long-term impact of trade disputes on the U.S. economy.
The research analyzed the annual GDP contribution of every major industry in the United States using data from the Bureau of Economic Analysis. Industries with the highest output were identified as the most critical drivers of job creation and economic expansion.
Imports, which include both physical goods and services such as financial services purchased from other countries, ranked first overall. The industry’s $3.85 trillion contribution is more than two and a half times higher than the national industry average of $1.09 trillion.
Housing and utilities ranked second, contributing $3.35 trillion to GDP. This sector includes essential services such as electricity, gas, water, and sewage, and performs 207 percent above the national average.
Imported goods, defined as businesses that import physical products for resale, ranked third with a GDP contribution of $3.1 trillion, 184 percent higher than the average across all industries.
Health care ranked fourth, generating $3.06 trillion in economic output. State and local consumption expenditures, which include spending on education, public safety, and law enforcement, ranked fifth, contributing $2.4 trillion to GDP.
Other major contributors included nonprofit institutions serving households, exported goods, and various service sectors. Together, these industries form the backbone of U.S. economic activity and employment.
By contrast, several industries recorded significantly lower contributions. Farming ranked last, with a negative GDP contribution of $3 billion, 100 percent below the national average. Nonfarm industries followed with just $45 billion in output, while entertainment, literary, and artistic originals generated $111 billion.
National defense and nondefense gross investments ranked slightly higher, contributing $219 billion and $224 billion, respectively, though both remained well below the national benchmark.
Commenting on the findings, Sanjeev Balasubramanian, senior vice president of solution architecture at Algo, said imports play a vital role in sustaining U.S. economic growth.
“Imports have the greatest impact on GDP when compared to other U.S. industries, demonstrating the crucial role importing has in the nation’s economic growth,” he said. “This data suggests that the U.S. is heavily reliant on foreign goods and services, which means the country is both dependent on global trade while also benefiting from globalization.”
Balasubramanian added that the disparity between industries underscores how shifts in trade policy could have wide-reaching effects across the economy.
“With farming showing the lowest contribution to GDP, it will be interesting to see how lower-ranking industries evolve in the coming years while prioritizing growth,” he said.
As trade tensions continue to rise, economists warn that prolonged tariffs and supply chain disruptions could threaten one of the most significant pillars of America’s economic output, placing added pressure on growth, prices, and employment nationwide.
