Archive for the ‘Industry and Analysis’ Category

h1

Supply Chain Sustainability: An Opportunity for U.S. Businesses

July 29, 2022

This post contains external links. Please review our external linking policy.

Caroline Kaufman and Francys Veras are International Trade Specialists in the Office of Supply Chain, Professional & Business Services.

The Covid-19 pandemic exposed the vulnerabilities of global supply chains, making them a household matter for everyday Americans. Across the country, Americans have experienced shortages of essential products, such as toilet paper, disinfecting wipes, and bottled water, as well as long delays to receive products ranging from household furniture to exercise bikes. As images of empty store shelves and backlogged cargo ships in ports became commonplace, so did the call for stronger, more resilient U.S. supply chains.

For U.S. supply chains to be strong and resilient, they must also be sustainable. Each process in the supply chain, from procurement of sustainable raw materials to low-emission delivery of the product, can be assessed to mitigate its environmental impacts. Sustainable supply chains not only protect global value chains in periods of crisis like a pandemic, but they can also improve overall productivity and help businesses reduce waste. In addressing the climate crisis, stakeholders across the supply chain must recognize that dependence on fossil fuels for the majority of supply chain activity is not a long-term solution.

A pie chart depicting U.S. greenhouse gas (GHG) emissions by economic sector in 2020 with the transportation sector accounting for 27 percent of total emissions. The next source of GHG emissions is the electricity sector with 25 percent, followed by industry with 24 percent, commercial and residential with 13 percent, and agriculture with 11 percent. Source: U.S. Environmental Protection Agency (EPA), Inventory of U.S. Greenhouse Gas Emissions Since 1990-2020.
Figure 1: The pie chart depicts U.S. greenhouse gas (GHG) emissions by economic sector in 2020, with the transportation sector accounting for 27 percent of total emissions. Source: U.S. Environmental Protection Agency (EPA), Inventory of U.S. Greenhouse Gas Emissions Since 1990-2020. Most recent data was released in April 2022.

In 2020, the U.S. transportation sector accounted for the largest portion (27 percent) of total U.S. greenhouse gas (GHG) emissions. Freight transportation accounted for over one third of those emissions. With transportation services responsible for the movement of global trade, these supply chain services industries are increasingly critical to addressing not only the supply chain crisis, but also the climate crisis.

Moving the Needle Forward: Public and Private Sector Must Work Together

The Biden-Harris Administration has prioritized strengthening U.S. supply chains, as well as creating sustainable U.S. supply chains. In November 2021, Congress passed the Biden-Harris Administration’s Bipartisan Infrastructure Law, or the Infrastructure Investments and Jobs Act (IIJA), which invests $17 billion in modernizing infrastructure at coastal ports, inland ports, waterways, and land ports of entry.  

A graphic showing a cardboard airplane trailed by green leaves on a blue background.

The Administration has also worked closely with the private sector to set ambitious goals across the freight logistics industries, for example by announcing the Sustainable Aviation Fuel (SAF) Grand Challenge in September 2021. The SAF Grand Challenge seeks to inspire the domestic production of at least three billion gallons per year of SAF by 2030 and 35 billion gallons of SAF by 2050, enough to supply 100 percent of projected U.S. aviation fuel demand in 2050.

While government initiatives are part of the solution, supply chain sustainability initiatives must also be led by the private sector. Across the different freight transportation industries – including aviation, maritime, rail and truck – U.S. businesses have committed to creating both a more resilient and more sustainable domestic supply chain.

ITA’s Supply Chain Sustainability Efforts and New Report

To help identify where opportunities and challenges exist for U.S. supply chain businesses, ITA’s Office of Supply Chain, Professional and Business Services (OSCPBS) works to address policy and regulatory issues to ensure that the U.S. supply chain system will be among the world’s greenest and most sustainable in facilitating the movement of goods across the nation and abroad. We identify the latest U.S. industry developments in supply chain sustainability. Using that information, we support industry in reducing their carbon footprint and work to enhance the competitiveness of sustainable U.S. transportation and logistics services.

ITA’s OSCPBS recently published a Supply Chain Sustainability Report that examines related key trends, public and private sector initiatives for a more sustainable future across the major modes of freight transportation, and describes how the Biden-Harris Administration and industry have worked together to set ambitious goals to reduce emissions, an important groundwork for progress. It notes that fuel technologies are a key area for research and investment for U.S. freight companies, and it offers examples of ongoing developments. It also notes that while the private sector has been increasingly innovating to address climate change, there continues to be a great need for strong regulatory and market incentives to accelerate decarbonization in the freight sector.

Check out ITA’s Supply Chain Sustainability Report to learn more.

h1

Turn Export Opportunities into Sales: New Online Trade Finance Guide Makes it Easier than Ever

July 27, 2022

This post contains external links. Please review our external linking policy.

Yuki Fujiyama is a trade finance specialist in the Office of Finance and Insurance Industries and the author of the Trade Finance Guide: A Quick Reference for U.S. Exporters.

Many U.S. small and medium-sized enterprises (SMEs) struggle to find ways to expand their sales, unaware of the economic potential that lies in diverse global markets. And, with 95% of the world’s consumers residing outside of the United States, it can be daunting to consider how to reach them and navigate global trade.

Front cover image of ITA's Trade Finance Guide, A Quick Reference for U.S. Exporters

The U.S. Department of Commerce’s International Trade Administration (ITA) is dedicated to helping U.S. businesses reach success through exports. One of the ways we do this is through ITA’s free online resource, our Trade Finance Guide: A Quick Reference for U.S. Exporters.

This concise, easy-to-understand and use tool was first published in 2007 and specifically developed as a how-to guide for U.S. SMEs seeking to enter and expand their businesses in global markets, while also overcoming common challenges to leverage export opportunities into actual sales. Whether you’ve been in business for years or are just starting out in the export market, we have the information and resources you need to make well-informed decisions and get your business on the map.

Let me walk you through our guide.

What is the Trade Finance Guide?

The Trade Finance Guide covers the most commonly used trade finance techniques and U.S. government export finance programs written in plain, easy-to-understand language. The Guide is:

  • A “60-minute” self-learning tool for America’s new-to-export SMEs that wish to learn about their financing options and how to ensure getting paid from export sales.
  • A user-friendly counseling tool for international credit, banking, and trade finance professionals and export counselors for client assistance and business development.
  • A flexible educational tool for academic institutions teaching international business subjects.

Our guide uses a no-nonsense approach to make it easier for new-to-export SMEs to learn the basics of trade finance and to understand how to mitigate the risk of non-payment while winning new cross-border sales opportunities and assuring the delivery of goods and services to importers.

What’s New 2022?

The Guide is now an online-based publication! ITA will continuously update the new online edition of the Guide, including making available a downloadable version with revisions annually.

The modernizedGuide has been refined to provide better clarity, and adds two new chapters targeting SMEs in their recovery from the COVID-19 pandemic and to explore financial innovation through digitalization:

  • Chapter 1:   Access to Capital for Startups in Global Markets
  • Chapter 16: Emerging Trends: The Digitalization of Trade Finance

Finally, the Trade Finance Guide website will post short resource videos in the following chapters:

We hope that you’ll use this information to think globally when planning business strategy. Remember that ITA has dedicated staff to assist you, regardless of what step in the process you’re in.

The 2022 online edition of the Trade Finance Guide was developed in collaboration with the following private-sector organizations and U.S. government export finance agencies.

Private Sector Organizations:

  • BAFT:  Bankers Association for Finance and Trade
  • FCIB:  Finance, Credit, and International Business Association
  • ICTF:  Association of International Credit & Trade Finance Professionals
  • IFA:  International Factoring Association
  • ITFA:  International Trade and Forfaiting Association – Americas Regional Chapter
  • NASBITE:  NASBITE International
  • Thunderbird: Thunderbird School of Global Management at Arizona State University

U.S. Government Export Finance Agencies:

For more information about the Trade Finance Guide, contact Yuki Fujiyama, the author and project manager of the Guide, in ITA’s Office of Finance and Insurance Industries via email at yuki.fujiyama@trade.gov .

h1

Trade Spotlight: There’s Nothing Standard About Standards

October 25, 2021

Written by ITA’s Office of Standards & Intellectual Property

This post contains external links. Please review our external linking policy

Image of four different orange cords used to connect electronics.

You may not realize it, but standards are a part of your everyday life. Like atoms and molecules, standards are often invisible to the naked eye but play a fundamental role in nearly everything we do. From wall outlets in homes to fuel nozzles on cars and pipe fittings for USB ports, standards help keep the world connected. In recognition of World Standards Week, ITA’s Office of Standards & Intellectual Property (OSIP) offers a peek behind the curtain into the world of standards and why they matter for global trade.

What are Standards and how are they connected to trade?

At its simplest, a standard is a document that lays out a common understanding of the characteristics for a particular product, process, or service. Standards are a way for different groups – designers, suppliers, regulators, and consumers, among others – to have confidence that they’re all talking about the same thing. Many standards define terminology while others outline testing and measurement techniques. For technologies like WiFi or 5G, tech companies may standardize interfaces so products from various companies can all work together and anywhere in the world.

Standards are voluntary, with companies choosing to adopt them when it is valuable. For example, while no law requires that a laptop be able to access WiFi, most manufacturers build to that standard to meet the expectations of their customers. In some cases, governments may adopt a standard into their technical regulations, effectively making it mandatory. ITA has found that 92% of U.S. exports are affected by standards-related technical regulations, making them the most common non-tariff trade barrier reported by companies.

Don’t Forget Your Adapter

Standards may differ from country to country. If you’ve ever needed to purchase an adapter for your devices when traveling, you’ve experienced this difference firsthand. To minimize global trade fragmentation, the World Trade Organization (WTO) Agreement on Technical Barriers to Trade commits signatories to use relevant international standards whenever possible. ITA’s Office of Standards & Intellectual Property works with countries and industry consortia around the world to promote the adoption of international standards in markets to ensure that U.S. exporters don’t face standards-related barriers to trade.

Celebrating World Standards Week

While many people rarely see standards development in action, the United States boasts a vibrant standards development community, which we celebrate every October (October 14 marks World Standards Day). Unlike many countries, the U.S. private sector leads standards development in the United States through a “bottom-up” system coordinated by the American National Standards Institute (ANSI), a private non-profit organization. ANSI and the Department of Commerce’s National Institute of Standards and Technology (NIST) co-chair an annual event known as “World Standards Week,” bringing together standards stakeholders to mark the occasion. This year’s event will to be held virtually on October 25-28, with a second in-person celebration in May 2022. This year will focus on the role of standards in fulfilling the UN’s Sustainable Development Goals (SDGs), which are closely aligned with the Biden Administrations strategic goals.

We hope you too join us in celebrating standards! Contact OSIP for more information about standards and learn more about World Standards celebrations and events happening this week here.

h1

Trade at the Local Level: 2020 Metropolitan Export Data Now Available

August 3, 2021

Ujjwall Uppuluri, Gulbin Yildirim, and Amanda Reynolds are International Economists in the Office of Trade and Economic Analysis

Figure 1 shows a map of the United States with 392 metropolitan statistical areas shown in color based on 2020 goods exports rankings measured in billions of USD. Houston, Texas was the largest metropolitan area exporter in 2020.



Sources: U.S. Census Bureau and U.S. International Trade Administration.

Most Americans live in metropolitan areas, which consist of densely populated core regions and surrounding areas with ties to those cores. Statisticians define these as Metropolitan Statistical Areas (MSAs), and trade specialists study these localities because they can provide valuable insight into the performance of U.S. exports, industries and our economy. MSAs, after all, are critical players in the U.S. economy and trade, accounting for an average of 89 percent of U.S. exports over the last five years.

Despite global economic impacts from the COVID-19 pandemic, 2020 was still a big year for the 392 MSAs of the United States, which in total exported $1.3 trillion in goods. While exports declined $194 billion from 2019, a deeper study of the MSA data reveals pockets of resilience. In fact, almost one-quarter of reported MSAs experienced export growth, with Portland (OR) and Stockton (CA) leading the charge (with increases of $4.1 billion and $2.5 billion, respectively).

In this blog, we will walk you through MSA export highlights for 2020, including destination and sector detail.

Top Metropolitan Area Exporters

Figure 2 line graph shows the top 15 metropolitan area exporters in 2020 and their ranks in 2018 and 2019. Houston (TX), New York (NY), and Los Angeles (CA) maintained their ranks as the top three metropolitan area exporters from 2018 through 2020.
Sources: U.S. Census Bureau and U.S. International Trade Administration

For 2020, the top five MSA exporters by value included Houston (TX), New York (NY), Los Angeles (CA), Chicago (IL), and Dallas (TX). International trade is not just for the major U.S. hubs, however; the top 15 exporting MSAs also include smaller areas like Corpus Christi (TX), and El Paso (TX), which benefit from their location on the U.S. border.

While the top four exporting MSAs maintained their ranks from 2019, other top MSAs experienced shifts. For example, Seattle (WA) fell in rank from the 5th to the 14thlargest MSA exporter, largely explained by a drop in transportation equipment exports. In contrast, New Orleans (LA), a U.S. agricultural products hub, bumped up three places in rank to the 6th-largest exporter. Corpus Christi (TX) and Portland (OR) also had notable increases in rank, driven by increases in oil and gas and computers and electronics, respectively.

Top Export Products

Figure 3 is a bar graph showing the top five metropolitan area exporters and their top five export products in 2020 measured in billions of USD. Chemicals and computers and electronics were among top exported goods for all give of MSAs shown.
Sources: U.S. Census Bureau and U.S. International Trade Administration

MSA data also provides us with insights into products, not just places. For example, chemicals and computers and electronics were among the top exported goods for all the top five MSA exporters by value in 2020. Four of the top five MSAs also counted transportation equipment among their top exports. Looking across all MSAs, top export growth sectors included agricultural products and primary metal products, sectors which are less prevalent among the top five MSAs.

Top Export Destinations

Studying MSAs also helps us understand country-level demand for our products. 2020’s top MSA export recipients included Canada, Mexico, China, Japan, and the United Kingdom. In part because of their proximity to the U.S., Canada and Mexico are major markets for many metropolitan areas; one or both partners were among the top five export destinations for 45 of the 50 top metropolitan area exporters in 2020. China, the world’s most populous nation, was the top market in terms of export growth for many metropolitan areas in 2020 – New Orleans, Houston, and Portland all saw significant export increases to China, ranging from $2 to $4 billion.

Learn More

These are some of the highlights for the latest metropolitan area export data, but there is a lot more to see and learn about international trade at the local level. Be sure to visit ITA’s Metropolitan Export Series, a public database with interactive maps, data tools and factsheets showing U.S. goods exports by metropolitan area back to 2005. You will find information on top market destinations, top export sectors, exports by 3-digit ZIP code and county, and more!

h1

Exploring the Global Economic Recovery from COVID-19

June 15, 2021

Brooke Tenison is an International Economist in the Office of the Deputy Assistant Secretary for Trade Policy and Analysis; and Susan Xu is an International Economist in the Office of Trade and Economic Policy

This post contains external links. Please review our  external linking policy. 

A heatmap of global GDP growth rates for 2021. Relatively few countries are projected to continue to suffer negative growth rates over the next year. Many countries, especially across Africa and the Middle East, are predicted to see modest growth up to 3 percent. Advanced economies are projected to see mainly between 3 and 5 percent, while a very select few, including China, are projected to show more than 8% growth.
Data Source: IMF World Economic Outlook

Since the COVID-19 pandemic was declared in March 2020, the world economy has weathered stop-go rhythms with shutdowns and reopenings, and markets of all shapes and sizes incurring tremendous losses. However, with the arrival of multiple effective vaccines, the world is looking toward recovery, both from an economic and public health perspective.

According to the International Monetary Fund’s World Economic Outlook released in April 2021, the global economy is projected to recover in 2021 and 2022 with anticipated GDP growth of 6% and 4.4% respectively. This growth, however, is not projected to be shared equally across countries or industries.

As trade economists, we’d like to offer perspectives about how the economic recovery is progressing.

Economic recovery so far is based on three main factors:

  • First and foremost is uneven access to vaccines—each economy’s growth hinges on vaccine availability and efficacy.
  • Second, domestic policies, which vary across countries, significantly impact the pace of economic recovery.
  • Third, the pace of recovery will also depend on country-specific structural factors, particularly reliance on high-contact sectors, such as tourism.

Furthermore, advanced economies and developing countries vary in their capacities to execute short- and long-term recovery strategies. This has a direct impact on their abilities to recover:

  • Advanced economies are projected to recover faster than emerging market and developing economies. Advanced economies had the fiscal space at the beginning of the crisis to implement effective stimulus measures, and many now can quickly roll out vaccines. This bloc tends to have larger work-from-home flexibility in conducting business as they generally have higher technology intensity in the production process and digital infrastructure.
  • Conversely, developing countries historically do not have as much room in their budgets to stimulate their economies, and have not been able to vaccinate their populations as quickly as advanced economies. Lacking access to vaccines effectively places a ceiling on growth, and some estimates project that developing economies will not have widespread access to vaccines for several years. Businesses in developing economies tend to depend more on face-to-face interactions and have fewer work-from-home jobs. In the meantime, developing economies will likely suffer from economic scarring, or long-term effects.

 Recoveries also vary largely by country according to the data in May. In particular:

  • The United States is projected to surpass pre-COVID levels of GDP in 2021 thanks to a rapid vaccine rollout and three rounds of stimulus checks that have kept American consumers spending through the pandemic.
  • The European Union (EU) is expected to recover to pre-COVID GDP levels a bit later, in mid-2022, due to a slow vaccine rollout and dependency on sectors that rely on human contact and interaction, such as tourism, cultural and creative industries. The EU has struggled with a third wave of COVID-19 infections and new lockdowns.
  • In contrast, the United Kingdom (UK) is expected to recover faster than the rest of Europe despite having longer lockdowns than many European countries, one of the deadliest outbreaks in 2020, and complications from Brexit. Its early procurement of vaccines and rapid vaccination drive to deliver the first shot to as many people as possible are key to a quicker recovery. Also important is the UK’s quick fiscal policy response; it was the first major economy to set plans to repair the damage to public finances caused by the pandemic.
  • China has surprised many with the speed of its recovery. The world’s second-largest economy grew 2.3% in 2020—the only major economy to avoid a contraction last year. This growth has continued in 2021 as a rebound in foreign demand has encouraged higher export growth. Partially hit by global chip shortages and international logistics jams, the economy’s strong pandemic bounce-back presents a two-speed track, with strong industrial output and export demand but lagging consumer spending.

Focus on Trade:

As of spring 2021, overall global trade volumes have numerically returned to pre-pandemic levels, but their composition looks different. According to the UN Conference on Trade and Development (UNCTAD), global trade began recovering in the third quarter of 2020 and continued through the end of the year. Goods trade led the charge, recovering far more quickly than services. Goods like home office and communications equipment performed remarkably well compared to last year. Services trade, suffering from pandemic-related restrictions as well as consumer hesitation to travel, bottomed out in the second quarter of 2020 and is recovering sluggishly. Travel and tourism is understandably the most impacted services sector (check out NTTO’s dashboard for how this is progressing in the U.S.).

For a U.S. perspective on the recovery in trade, check out ITA’s monthly analysis of U.S. exports, imports, and other vital trade data.

From a global perspective, this crisis will continue to have echo-effects long after the virus is contained. With each passing day we have some more insight into how the virus has affected the global economy. While it is too early to understand the full picture, for now we can see simply that growth has a double ceiling: virus containment and vaccine access. Until the virus is controlled, we will continue on a bumpy, uneven road to recovery.

h1

COVID-19 Economic Recovery: An Important Moment Arrives for U.S. Exporters

May 19, 2021

Eak Gautam and Ian Saccomanno are International Economists in the Office of Trade and Economic Analysis

This post contains external links. Please review our external linking policy. 

Across the globe, businesses of every shape and size are reopening doors and welcoming back customers. The COVID-19 pandemic disrupted economies and industries everywhere, but this unique moment of economic recovery offers U.S. companies an exciting opportunity to explore new international markets for exporting American products.

If you’re unsure how essential exporting is to our economy, consider the facts:

  • Businesses that export are less likely to go out of business, record higher revenues, create more jobs, and pay higher wages than those that don’t.
  • An average of 12% of the U.S. economy has consisted of exports every year for the past decade.
  • The U.S. only accounts for 4% of the world’s population, which means there are plenty of markets and customers to explore.

We previously looked at the unusual export and import trends of 2020 and for 2021 will be issuing monthly updates to help us understand the economy’s performance. 2019 is also an important year for us to study, as it provides a baseline for us to understand the profile of U.S. exporters before the pandemic hit.

What goods & services does the U.S. export?

From mattresses to ice cream to financial services, the U.S. exports a huge variety of goods and services from every sector.

Tree map comparing the values of different U.S. goods and services exports, with capital goods and industrial supplies holding the largest portions.
Figure 1: Sources: U.S. Census Bureau and Bureau of Economic Analysis. The small boxes at the bottom right are construction services and net exports under merchanting.

The United States. is globally competitive in many manufactured products. Aircraft, cars and parts, and semiconductors are our largest manufactured goods exports. Other key exports are agricultural products, with 20-25% of all food grown in the U.S. exported, and oil. Just as impressive are U.S. service exports like travel, business services, research, and intellectual property. We are the single largest exporter of services in the world; 14% of all global services exports originate here. Prior to the pandemic, U.S. travel and tourism averaged roughly $200 billion per year, and product R&D and intellectual property licensing combined averaged $144 billion per year.

What countries receive the most U.S. exports?

The largest destination for U.S. goods and services exports are Mexico and Canada, our neighbors and free trade partners in the United States–Mexico–Canada Agreement (USMCA). China, the United Kingdom and Japan also account for large shares of U.S. exports. Combined, these trade partners accounted for 43% of U.S. exports in 2019.

Where are U.S. exporters?

Exporters come from every pocket and community in the United States. Each state exports a variety of goods and greatly contributes to the diversity of American exports. For example:

  • Texas is a center of oil and chemical production.
  • California’s tech industry and orchards are world leaders.
  • New York is a global hub for precious metals.
  • Washington is a center of aircraft manufacturing.
A heat map of the U.S. showing the relative amount of good exports from each state with Texas and California being the largest.
Figure 2: Source: U.S. Census Bureau, Exports by Origin of Movement (origin state-based)

Exporting is not just a game for the biggest states, though. Per person, South Carolina, Delaware, and Puerto Rico each export more goods than California.

What about U.S. small business exports?

Small- and medium-sized enterprises (SMEs) are the backbone of the U.S. economy: they create two-thirds of net new jobs and account for more than 40% of the U.S. economy. 97.4% of all goods exporters are SMEs. By export value, large exporters make up two-thirds of goods exports ($996 billion), while SMEs make up the remaining third ($460 billion).

Bar charts showing SMEs and large exporters by company type. Their values in 2019 were $288,063 and the exporters exported $1,455 billion.
Figure 3: Source: U.S. Census Bureau

What jobs are supported by exports?

U.S. exporters directly support U.S. jobs. According to ITA’s research, goods and services exports supported about 10.7 million jobs in 2019. Each $1 billion of exports supports about 5,095 jobs. Additionally, export-intensive industries pay more, on average, than those that sell mostly domestically. Workers employed in manufacturing industries that export earn 19% more  than their peers who work in manufacturing industries that don’t export. 

Trade with Mexico and Canada (through USMCA) and Asia support the most goods-related jobs, and trade with Europe supports the most services jobs. More manufacturing jobs are supported by the U.S.-Mexico-Canada free trade zone than by any other region.

Bar graph with jobs supported by goods and services divided by region in 2019. USMCA supported the highest number of goods-producing jobs where as exports to Europe supported the highest number of services jobs.
Figure 4: Source: Office of Trade and Economic Analysis, International Trade Administration

The International Trade Administration regularly monitors U.S. trade patterns. If you’re interested in learning more, all this data, including interactive visualizations, can be found at https://www.trade.gov/trade-data-analysis.

h1

A Year Like No Other: Overview of U.S. Trade in 2020

March 22, 2021

Gulbin Yildirim and Ian Saccomanno are International Economists in the Office of Trade and Economic Analysis

Overshadowed by a global pandemic, 2020 was a challenging year for U.S. trade as unprecedented social restrictions, changing work patterns, and supply-chain disruptions caused a worldwide recession and hampered trade flows. U.S. exports of goods and services fell 15.9 percent to $2.1 trillion and imports declined 9.5 percent to $2.8 trillion in 2020. The drop in exports was the largest on record while imports saw their largest decline since 2009. Because exports decreased more than imports, the U.S. trade deficit increased 18.2 percent to $681.7 billion, the highest level in the last 12 years (Figure 1). A record-breaking goods deficit and shrinking services surplus were equally responsible for the increase in the overall deficit.

Graph showing changes in exports, imports ,and trade deficit from 2008 to 2020. Graph shows drops in exports and imports to 2.8 trillion U.S. dollars and 2.1 trillion U.S. dollars in 2020, respectively. Trade deficit grew to 681.7 billion U.S. dollars in 2020
Figure 1: Sources: U.S. Census Bureau and Bureau of Economic Analysis.

While declines in both exports and imports were largely expected because of the recession, the deterioration in trade balance was unusual. In the past recessions, U.S. trade deficits shrank as the fall in domestic consumption led imports to drop more than exports. For instance, during the Great Recession, the U.S. trade deficit contracted by almost 45 percent (Figure 1).

The unique nature of the COVID-19 recession, the first global recession solely triggered by a pandemic, was behind this key difference. The efforts to fight the virus increased the demand for imported medical products which helped imports bounce back quickly. Lingering social and economic effects of the pandemic, on the other hand, hindered recovery in key U.S. export categories.

Declining Exports Led the Increase in the U.S. Goods Trade Deficit

The U.S. experienced a record-high goods trade deficit ($905.2 billion) with exports decreasing at more than double the rate of the decline in imports (-12.9 percent vs. -6.4 percent).

A significant share of PPE such as face masks are classified under Textiles.
Figure 2: Sources: U.S. Census Bureau and Bureau of Economic Analysis. Data non-seasonally adjusted on a Census basis. Categories shown are the top 5 increases and decreases.

The sharp drop in exports was led by the largest U.S. export sectors, including aircraft & spacecraft, vehicles, petroleum products, and machinery (Figure 2). These four sectors accounted for 41 percent of total goods exports in 2019 but were responsible for more than 70 percent of the overall export decline in 2020. The pandemic hit these sectors particularly hard as reduced domestic and international travel, uncertainty over consumers’ incomes, and plant closures caused both supply and demand to plunge at the same time.

On the other side of the scale, higher imports of gold and medical products, including pharmaceuticals and personal protective equipment (PPE), partially offset the decreases in other categories such as petroleum products. According to ITA’s analysis, PPE imports increased by more than 240 percent, the bulk of which came from China (72 percent). Similarly, imports of gold soared nearly 260 percent in value as the uncertainty from the pandemic curbed risk-appetite in markets and turned investors to safe haven assets. Switzerland was the largest supplier of gold to the U.S., boosting U.S. goods imports from Switzerland to their highest level on record.

Decreased Travel Exports Led the Drop in the U.S. Services Surplus

Although 2020 saw a record-high deficit in goods, a shrinking surplus in services equally contributed to the increase in the overall trade deficit. U.S. exports and imports of services fell 21.0 percent and 22.1 percent, respectively, in 2020 and the overall surplus in services decreased 18.6 percent to $233.9 billion, the lowest level since 2012. By comparison, the decline in the services surplus at the peak of the Great Recession was only 4.3 percent.

Graphs showing the change in U.S. exports from 2019-2020 across various services.
Figure 3: Sources: U.S. Census Bureau and Bureau of Economic Analysis. Data seasonally adjusted on a Census basis.

Travel and transport services led the decline for both exports and imports of services as each fell more than 50 percent from 2019. Other services categories, however, proved more resilient to the pandemic (Figure 3).

Automotive, Oil and Aircraft Sectors Dominated Declines in Goods Trade with Top Partners

Goods trade with top partners was also shaped by COVID-19’s severe impact on the largest export and import sectors of the United States (Figure 4). Trade with Canada and Mexico fell significantly in both directions, led by declines in automobiles and auto parts and petroleum products. The decline in trade with our two neighbors accounted for nearly 40 percent of the decline in total goods exports and over 50 percent of the drop in total goods imports.

The decrease in exports to the European Union (EU) was largely driven by fewer aircraft sales. Aircraft parts and passenger cars were the categories where imports from the EU fell the most.

Graphs showing changes in goods imports and exports by trade partner. Partners are ranked by 2020 exports/imports from greatest to least.
Figure 4: Sources: U.S. Census Bureau and Bureau of Economic Analysis.

One positive development for American exporters was the increase in soybeans and crude oil shipments to China which led goods exports to that country to grow 17.1 percent.

Imports from China fell 3.6 percent with declines in telecommunication equipment, apparel, and footwear.

In contrast, imports from several South Asian countries such as Vietnam, Malaysia, Singapore, and Taiwan reached their highest levels on record.  Higher demand for electronics, machinery, furniture, and apparel played an important role in increased imports from these countries.

More data on national and subnational trade, including interactive visualizations, can be found at https://www.trade.gov/trade-stats-express.

h1

Traveling on Your Mind? The U.S. Travel and Tourism Industry is Eager to Welcome You to the United States

March 11, 2021

Isabel Hill serves as the Acting Deputy Assistant Secretary of Travel and Tourism for ITA’s National Travel and Tourism Office 

A hiker takes in the breathtaking view at Horseshoe Bend in Glen Canyon National Recreation Area, Arizona (Source: BrandUSA)

We miss traveling too. Whether you are seeking beaches, mountains, big city towers, or national parks, America offers many exciting destinations for tourists. And let’s face it: Bucket lists have only grown during quarantine. In 2020 we estimate international visitation to the United States declined 76% while the share of global travelers planning a vacation fell to a record low. 

Fortunately, brighter days seem to be ahead for the U.S. travel and tourism industry as COVID-19 vaccination rates are on the rise. Many U.S. destinations have worked for months to implement health and safety measures and are starting to launch marketing and promotion campaigns to attract new and returning visitors after such a hard year.

To help U.S. businesses and communities who rely on tourism plan ahead, the International Trade Administration last week launched the COVID-19 Travel Industry Monitor–a user-friendly web platform that brings key health, economic and travel data all together in one place. The Monitor tracks a number of indicators important for the performance of the travel and tourism sector in the United States in the wake of the pandemic, including: COVID-19 Cases, International Visitation, Travel Indicators, Travel in Trade, Business and Consumer Sentiment, and Key Economic Indicators.   

The data displayed in the Monitor is derived from existing data sources from federal, state and local agencies, as well as private sector entities. The Monitor is updated weekly, though many data sets are dependent on monthly data that takes a few weeks to process. Data on the dashboard today dates from January 2021. 

I would like to thank the U.S. Travel and Tourism Advisory Board and the other industry stakeholders and data partners who provided tremendous input for this Monitor. To access the Monitor, click: https://www.trade.gov/data-visualization/covid-19-travel-industry-monitor 

h1

STOPfakes Roadshows Deliver Critical Intellectual Property Information to U.S. Businesses

May 5, 2020

By Benjamin Hardman, Senior International Trade Specialist, Office of Standards and Intellectual Property

StopFakes.gov logo roundThe need for U.S. businesses to be vigilant about protecting their intellectual property has never been greater. Many well-known U.S. brands are being knocked off by cheap counterfeits and pirated goods, mainly made in China, and marketed through e-commerce platforms.

The trade secrets of our most innovative companies are increasingly targeted for theft with tradecraft more commonly seen in state-sponsored espionage. The creative genius of American artists, authors, inventors, engineers, and other creators is stolen and sold for pennies on the dollar. America’s comparative advantage, our ingenuity, is under attack, and we must do everything we can to uphold and strengthen American businesses, so they may protect themselves and advance our global competitiveness.

Since 2005, the International Trade Administration’s STOPfakes program has served as an important mechanism in harnessing the IP resources of various U.S. Federal agencies through a singular channel, providing guidance to U.S. businesses and consumers.

The STOPfakes Roadshows are an essential component to our program’s success, delivering critical intellectual property information to the audiences that need it most: start-ups, entrepreneurs, small and medium-sized businesses, independent creators, and inventors.

STOPfakes conducts 8 to 10 roadshows each year in partnership with local U.S. Export Assistance Centers, bringing the program to cities across the country. The information at STOPfakes roadshows is provided by IP experts from multiple government agencies. Their presentations of timely and invaluable information during the one-day seminars allow for the best means of advancing U.S. IP interests.

  • The International Trade Administration identifies mechanisms for obtaining intellectual property protection in export markets;
  • The U.S. Patent and Trademark Office provides information about how to protect patents and trademarks;
  • The U.S. Copyright Office discusses the importance of copyright protection to businesses;
  • The U.S. Customs and Border Protection explains how a registered trademark or copyright can be recorded with Customs to facilitate the seizure of infringing goods at the U.S. border;
  • The Federal Bureau of Investigation or a local Assistant U.S. Attorney discusses how to protect trade secrets and identify internal and external threats;
  • The U.S. Department of State highlights the role diplomacy and our diplomatic missions play in advocating for U.S. businesses overseas; and
  • The Small Business Administration advises on the potential use of grants and loans to help with the costs of obtaining IP protection before exporting.

Stopfakes medley of Intellectual Property images

In addition to the regular roadshow partners listed above, the Minority Business Development Agency, Export-Import Bank, and Patent and Trademark Resource Centers are also frequent participants. Our whole-of-government approach provides many resources to assist U.S. businesses with acquiring and protecting their intellectual property.

In 2018, the STOPfakes team expanded the opportunities available to businesses at the roadshows to include three signature offerings:

  • First, participants can sign up to talk one-on-one with the speakers for 10-minute sessions.
  • Second, participants can apply for copyright registration. U.S. Copyright Office staff will be on site to facilitate the application process required to register a work online. The fee is $55 for most works and takes approximately 20 minutes.
  • Third, participants can apply for copyright and trademark recordation. On-site assistance is made available by U.S. Customs and Border Protection staff. The fee for Trademark recordation is $190 per international class of goods, and the fee for copyrights are $190 per application. The registration process takes approximately 40 minutes.

For more information regarding the STOPfakes programs or to learn more about our resources and upcoming roadshows, please visit: www.STOPfakes.gov.

h1

ITA Connects Smart City Technology Exporters to Southeast Asia

April 22, 2020

This post contains external links. Please review our external linking policy.

By: ITA’s Industry & Analysis Office of Health and Information Technologies

Deputy Chief of Mission at U.S. Embassy Singapore Daniel Bischof (middle), U.S. Department of Commerce staff, presenters, and participants at an ASEAN Smart Cities Third Country Training Program event in Singapore, December 2019.

Deputy Chief of Mission at U.S. Embassy Singapore Daniel Bischof (middle), U.S. Department of Commerce staff, presenters, and participants at an ASEAN Smart Cities Third Country Training Program event in Singapore, December 2019.

Today, nearly 300 million people living in the 10 countries comprising the Association of Southeast Asian Nations (ASEAN) reside in urban areas, and this number is set to increase to more than 500 million by 2050. Like cities in the United States and elsewhere, ASEAN cities are increasingly looking to use digital technologies as part of their smart city efforts to address a wide range of urbanization challenges.

The International Trade Administration (ITA) is spearheading programming that connects U.S. smart city technology providers and experts with ASEAN cities to promote U.S. exports, increase U.S.-ASEAN best practices exchanges, and assist ASEAN cities in their development needs.

ITA’s work is part of the U.S.-ASEAN Smart Cities Partnership announced by Vice President Mike Pence in 2018. This multi-year program is a whole-of-government effort to promote collaboration between the two regions. To date, ITA has organized a variety of events to advocate for trade-enabling policies to connect U.S. technology providers to ASEAN cities.

Best Practices in Smart Cities

In December 2019, the United States and Singapore co-hosted a five-day workshop on Smart Cities in Singapore featuring a range of sessions on smart city planning. Debra Lam, Managing Director for Smart Cities and Inclusive Innovation at the Georgia Institute of Technology, reinforced the idea among the 24 participants that “all cities can be smart because it is a continuous improvement process.” As the former Chief Innovation & Performance Officer for the city of Pittsburgh, she was able to draw on her real-world experience. She encouraged cities to harness the power of emerging technologies rather than prematurely banning them, as blocking new technology can limit opportunities for future growth.

With each participant focused on one priority project that they hoped to develop in their city, ITA and experts from the region led interactive sessions for participants on:

  • planning and tailoring their smart city build-outs;
  • developing strategies to finance and sustainably fund their priority smart city projects;
  • adopting standards and project procurement best practices; and
  • mitigating cybersecurity risk.

Throughout the week, ITA connected ASEAN participants with U.S. industry partners such as Cisco Autodesk, and New York based Xylem to learn about innovative technology solutions to real world problems.

Industry Engagement

This past January, ITA led a delegation of Indonesian municipal officials to DistribuTECH, a leading energy and utilities trade show in San Antonio, Texas. U.S. companies participating and exhibiting at DistribuTECH had an opportunity to meet with key decision makers in Indonesia’s power sector, opening market prospects for technology and solutions critically needed in that nation. During the show, officials from Sumatra and Java discussed best practices with U.S. public and private sector representatives to facilitate development of Indonesia’s smart cities and smart grid infrastructure.

In recent months, ITA has continued extensive industry outreach to raise awareness of Southeast Asian smart city business opportunities and to plan for future programming.

Looking Towards the Future

During the next few years, ITA will continue to organize sector specific smart cities programs at trade shows focused on water, safety and security, transportation, cybersecurity, and waste management, among others. In addition, ITA will lead expert advisor delegations to ASEAN cities to engage with municipal governments on specific challenges they are facing and advocate for U.S. smart cities solutions that address those challenges.

If you are interested in connecting with us on future U.S.-ASEAN Smart Cities programs, please email USASCP@trade.gov.