Background

The International Trade Commission has updated its annual compendium of data and analysis examining changes in trade with key U.S. partners and in important industries. The “Shifts in U.S. Merchandise Trade 2018” report focuses on changes in U.S. imports, exports, and reexports with respect to ten sectors (agricultural products, chemicals and related products, electronic products, energy and related products, footwear, forest products, machinery, minerals and metals, textiles and apparel, and transportation equipment) and five trading partners (China, Mexico, Canada, Japan, and South Korea).

This year’s report includes a special section on merchandise trade subject to Section 232 and Section 301 tariffs as well as retaliatory tariffs imposed by other countries. This section includes a timeline of the major trade actions and presents examples of increases or decreases in imports or exports of products affected by these tariffs.

Exports. Total U.S. exports rose 7.6 percent in 2018 to $1.66 trillion and exports in all ten sectors examined in this report increased. Energy-related products showed the largest increase in terms of value (up 35.7 percent); this was mostly due to an increase in prices as volumes saw a relatively small increase. The other sectors with notable increases in export growth included footwear (8.8 percent), minerals and metals (7.2 percent), chemicals and related products (7.0 percent), and machinery (5.2 percent). On the other hand, there was a drop in the value of exports of oilseeds (-19.9 percent), aircraft engines and gas turbines (-7.7 percent), steel mill products (-7.1 percent), telecommunications equipment (-5.4 percent), and motor vehicles (-1.5 percent).

Across all merchandise sectors, exports were up to India (28.9 percent), Italy (25.8 percent), the United Kingdom (17.7 percent), South Korea (16.6 percent), Japan (10.9 percent), Mexico (8.9 percent), France (8.1 percent), Germany (7.0 percent), and Canada (5.8 percent) but down for China (-7.4 percent). Regionally, exports were down 0.7 percent to OPEC countries but up 12.7 percent to sub-Saharan Africa, 12.5 percent to the European Union, 9.0 percent to Latin America, and 5.9 percent to Asia.

Imports. The value of total U.S. imports rose 8.6 percent to $2.54 trillion in 2018 and imports in all ten industry sectors examined increased. The largest increases were in energy-related products (19.4 percent), chemicals and related products (16.1 percent), machinery (9.3 percent), and forest products (8.6 percent). With respect to specific products, imports of petroleum products (29.3 percent), medicinal chemicals (21.4 percent), and crude petroleum (18.1 percent) saw the greatest percentage increase in value, while imports of coffee and tea (8.3 percent) and telecommunications equipment (-3.6 percent) saw the largest decreases.

For all merchandise sectors, imports were up from the United Kingdom (14.6 percent), India (11.9 percent), Mexico (10.3 percent), Italy (9.6 percent), France (7.4 percent), Germany (7.1 percent), China (6.7 percent), Canada (6.4 percent), Japan (4.5 percent), and South Korea (4.0 percent). Regionally, imports were up from the EU (12.3 percent), OPEC countries (10.6 percent), Latin America (9.0 percent), Asia (6.8 percent), and sub-Saharan Africa (0.9 percent).

Trade Balances. U.S. trade balances improved in energy-related products (24.5 percent) but declined in the other industry sectors examined, including chemicals and related products (-66.9 percent), forest products (-49.8 percent), and machinery (-18.7 percent). All ten sectors saw a trade deficit, including agricultural products (which had a surplus from 2014 to 2017), and the largest deficits by sector were in electronic products ($229.2 billion), transportation equipment ($121.8 billion), and textiles and apparel ($105.0 billion).

The U.S. ran trade deficits with all its major trading partners except the United Kingdom. Deficits increased with China (11.6 percent), Canada (15.9 percent), and Mexico (14.9 percent) but decreased with Korea (-22.4 percent), India (-7.1 percent), and Japan (-1.8 percent).

Tariff Action Effects. The ITC finds that in all of 2018 U.S. exports of products covered by tariffs imposed by trading partners in retaliation for the Section 232 and Section 301 tariffs declined to China (-17 percent), Russia (-7 percent), Canada (-6 percent), Turkey (-4 percent), and Mexico (-2 percent) but increased to the EU (4 percent) and India (1 percent). For products not covered by retaliatory tariffs, U.S. exports increased to India (38 percent), China (14 percent), the EU (14 percent), Mexico (9 percent), Turkey (8 percent), and Canada (7 percent) but fell to Russia (-3 percent).

With respect to foreign products subject to the Section 232 and Section 301 tariffs, imports fell from Argentina (-14 percent) and South Korea (-11 percent) but increased from Australia (37 percent), Mexico (18 percent), the EU (12 percent), China (10 percent), Brazil (4 percent), and Canada (3 percent). Imports of non-covered products decreased from Australia (-3 percent) but increased from the EU (13 percent), Mexico (11 percent), Canada (7 percent), Brazil (7 percent), China (6 percent), South Korea (6 percent), and Argentina (2 percent).

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