Merchandise Exports, Imports and Trade Deficit All Up in 2012, ITC Report Finds
An annual compendium of data and analysis examining changes in trade with key U.S. partners and in important industries shows that U.S. merchandise exports rose 4%, imports rose 3% and the trade deficit rose 1% in 2012. The International Trade Commission report released Sept. 17 finds that macroeconomic shocks in key economies limited global trade.
According to the ITC, Shifts in U.S. Merchandise Trade 2012 offers a comprehensive review of U.S. trade performance in 2012, focusing on changes in U.S. exports, imports and trade balances in nine sectors (agricultural products, chemicals and related products, electronic products, energy-related products, forest products, machinery, minerals and metals, transportation equipment, and textiles, apparel and footwear) as well as changes in U.S. trade with China, the European Union, Japan, Mexico and Russia (selected this year because it experienced a large increase in trade with the U.S.). Also included are profiles of the U.S. industry and market for over 250 industry groups and subgroups, offering data for 2008-12 on consumption, production and trade.
Among other things, the report examines the principal drivers influencing trends in U.S. trade, leading products the U.S. exported to and imported from its most important trading partners and the key factors influencing trade in these products, and major factors affecting U.S. trade in 2012, including price fluctuations, increased domestic production of energy-related products and greater consumer access to financing for the purchase of durable products. This year’s report also examines U.S. import shifts during 2008-12 under various trade preference programs; specifically, fluctuations in the share of imports from eligible countries receiving preferential treatment, shifts in the composition of merchandise imported under these programs, and changes in eligibility and other factors affecting the use of the programs.
Highlights of this year’s report include the following.
- The U.S. trade deficit grew by 1% percent in 2012 to $897.8 billion as growth in merchandise imports exceeded growth in exports by $10.0 billion. Exports grew 4.2% and imports rose 2.9%, considerably lower than in 2011 when both increased by more than 15%.
- Seven of the nine U.S. merchandise sectors addressed in this report (all except the agricultural and forest products sectors) registered trade deficits in 2012. The most significant deficit expansions occurred in transportation equipment (up $23.6 billion, reflecting greater demand for motor vehicles stimulated by the increased availability of credit) and electronic products (up $10.7 billion, due in part to heightened consumer demand for smartphones and mobile computing devices). There were significant reductions in the deficits for energy-related products (down $40.6 billion as prices stabilized and increased domestic production led to lower imports) and chemicals and related products (down $5.5 billion).
- U.S. exports increased to $1.4 trillion in 2012, including larger totals for seven of the nine reviewed sectors. The greatest absolute increase occurred in the transportation equipment sector, where exports rose by $28.1 billion due in large part to higher demand for commercial aircraft and motor vehicles from key markets such as Canada, Mexico and China. The second-highest increase was in the energy-related products sector, which grew by $8.2 billion, followed by machinery, which rose $7.2 billion and reflected heightened demand for farm and garden machinery in Canada, Australia and Brazil.
- The value of total U.S. imports rose to $2.3 trillion in 2012, with the largest absolute shifts occurring in the transportation equipment (up $51.8 billion), energy-related products (down $32.4 billion) and electronic products (up $13.2 billion) sectors. Strong U.S. consumer demand for Internet-enabled smartphones accounted for half of all telecommunications equipment imports, and China remained the largest supplier of telecom goods to the U.S. market with a 60% share.
- Among its top five trading partners in 2012, the U.S. witnessed bilateral deficit increases with the EU (up $17.2 billion to $138.5 billion) and Japan (up $13.4 billion to $79.9 billion), due principally to larger imports of motor vehicles, and China (up $19.8 billion to $321.4 billion), due in part to growing demand for electronic products. The U.S. saw lower deficits with Canada (down $2.9 billion to $79.7 billion) and Mexico (down $1.5 billion to $101.2 billion) as heightened demand for motor vehicles and associated parts in those countries fueled U.S. exports.
- Imports from trade preference program beneficiary countries, whether under those programs or not, collectively accounted for 15% of all U.S. imports in 2012, three percentage points less than in 2008.
- Energy-related products accounted for 90–93% of all imports under the African Growth and Opportunity Act in each of the five most recent years, but the value of U.S. imports of energy-related products has significantly decreased since 2008. Transportation equipment (primarily motor vehicles from South Africa) and textiles and apparel (primarily textiles from South Africa and apparel from Lesotho, Kenya and Swaziland) were the next largest import categories under AGOA.
- U.S. imports under the Caribbean Basin Initiative recorded a significant decline from 2008 to 2009 and have fluctuated since. A major factor influencing the decrease was the removal of Costa Rica from CBI eligibility once DR-CAFTA entered into force for that country in January 2009. The leading import sector decrease in 2009 was of certain organic chemicals, primarily from Trinidad and Tobago, which was largely attributable to decreased demand in the U.S. market.
- The Generalized System of Preferences was the second leading trade preference program in terms of the value of U.S. imports during the 2008–12 period. GSP imports were much less concentrated than those of other programs, with no single industry sector accounting for
more than 35% of all GSP imports in any year of the most recent five-year period. Energy-related products were the largest industry sector during 2008–10 but there was a large decrease in this sector in 2011 due largely to the removal from GSP eligibility of Equatorial Guinea, a major producer of crude petroleum and natural gas since the 1990s.