The International Trade Commission released Aug. 15 Shifts in U.S. Merchandise Trade 2010, its annual compendium of data and analysis examining changes in merchandise trade with key U.S. partners and in crucial U.S. industries. An ITC press release states that this report provides a comprehensive review of U.S. trade performance in 2010, focusing on changes in exports, imports and trade balances of key natural resources, agricultural and manufacturing industries as well as changes in U.S. trade with major partners and groups. Also included are profiles of the U.S. industry and market for over 250 industry groups and subgroups, featuring data for the years 2006 through 2010 on consumption, production, employment and trade.
The report’s findings include the following:
From 2009 to 2010, the value of U.S. merchandise exports increased by 20% to $1.12 trillion and U.S. imports for consumption increased by 23% to $1.90 trillion. The associated trade deficit increased as well, rising by $164.1 billion (27%) to $776.5 billion. All U.S. industries and sectors except agricultural and forest products registered a trade deficit. The most significant deficits occurred in energy-related products, electronic products and transportation equipment.
U.S. exports increased in all merchandise sectors. The greatest absolute increase ($31.1. billion, or 19%) occurred in the chemicals and related products sector, 25% of which was driven by gains in certain organic chemicals and miscellaneous plastic products. Exports grew due to greater foreign demand for these products as a result of government policies in key foreign markets encouraging the adoption of renewable fuels and increased joint venture projects in key Asian economies. Transportation equipment exports grew by $28.3 billion (15%) and much of this growth was influenced by increased sales of motor vehicles. The third-largest reported absolute increase ($25.6 billion) and the greatest percentage shift (43%) occurred in the energy-related products sector, where price increases and refinery shutdowns in Brazil and Mexico contributed to increases in both the value and the quantity of U.S. exports of natural gas, petroleum, and coal, coke and other energy-related products.
An important factor contributing to the growth in U.S. merchandise exports was increased foreign demand due to rising incomes in many U.S. major trading partners. Real income growth for many of the United States’ major export partners, including Canada, the European Union, Mexico and Japan, was positive in 2010, ranging from 1.8% in the EU to 5.2% in Mexico, compared to negative real GDP growth rates in 2009. GDP growth was even higher in developing countries in Asia (9.3% on average) and Brazil (7.5%). Reflecting these increases in real GDP and foreign demand, Taiwan, Brazil, Korea and China accounted for the largest percentage growth rates for U.S. exports, by country.
The largest absolute increases in imports (by value) occurred in energy-related products ($77.3 billion), transportation equipment ($67.1 billion) and electronic products ($66.2 billion). Canada remained the leading source of U.S. imports of energy-related products, representing 28% of the total U.S. trade deficit in these products. Greater domestic consumption of motor vehicles accounted for 57% of the import growth in transportation equipment, and Canada, Japan and Mexico remained the largest suppliers to the U.S. market (a combined 64%). Within the electronic products sector, imports of three product groupings increased significantly, collectively growing by $45.2 billion: computers, peripherals and parts (up 25%); telecommunications equipment (up 23%); and semiconductors and integrated circuits (up 38%). Increased U.S. imports of these goods reflect the growing importance of Chinese production and assembly, as most electronic products are made or assembled in China through either contract manufacturing or indigenous companies.
There was an increase in the trade deficits between the U.S. and its five leading trading partners in 2010, including the European Union (up $21.8 billion), Canada (up $16.7 billion), China (up $47.9 billion), Mexico (up $26.6 billion) and Japan (up $15.3 billion). Together, these economies accounted for 78% of the total U.S. trade deficit, maintaining their relative positions from 2009 to 2010.
China remained the United States’ single largest source of imports by value, and the $278.3 billion deficit with China was the largest with any U.S. trading partner. The EU is the United States’ largest two-way trading partner, accounting for almost 20% of total U.S. merchandise trade in 2010, while Canada remained the largest single-country trading partner. The trade deficit with the EU was principally driven by increased U.S. imports of transportation equipment (motor vehicles) and chemicals and related products (petroleum products), though imports increased across virtually all sectors. The trade deficit with Canada was likewise heavily influenced by increased imports of energy-related products and transportation equipment. Price increases for petroleum products and favorable credit conditions associated with the improving U.S. economy were the likely causes for increased imports in these sectors.