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The Department of Commerce on Friday released the official U.S. trade statistics for 2015. The headline numbers aren’t pretty: For the first time since the 2008-2009 recession, U.S. exports declined, reflecting weakness in key foreign markets and a strengthening U.S. dollar – which makes American goods more expensive overseas.
But given that seizing the benefits of international trade and investment is a top priority for Chamber members, it’s worth taking a moment to dig a little deeper into the numbers:
- Drop in Exports and Imports: For 2015, exports of goods and services reached $2,230 billion, down $113 billion from the year before, and imports declined $90 billion to $2,762 billion. For goods alone, exports were $1,514 billion and imports were $2,273 billion (each down by more than $100 billion).
- Slower Growth for Exports: In the years after the recession of 2009, U.S. exports of goods and services rose by 16.6% in 2010, 14.5% in 2011, 4.4% in 2012, 2.8% in 2013, and 2.9% in 2014, but they fell 4.8% in 2015. Most recently, China’s slowing growth has had a knock-on effect as Chinese imports of commodities decline, weighing on commodity-producing economies in South America, Africa, and elsewhere — all of which in turn import less from the United States. This trend is likely to continue at least in the near term.
- FTAs Make Big Markets: Goods exports to America’s 20 free-trade agreement (FTA) partners reached $712 billion. These 20 countries purchased nearly half (47.3%) of U.S. goods exports in 2015, up about one-half of one percent from 2014. This is a remarkable performance given that these countries represent just 6% of the world’s population outside the United States. On a per capita basis, these countries purchase 12 times as many U.S. goods and services as non-FTA countries.
- Deficit Rises Slightly … The goods and services deficit was $532 billion in 2015, up from $505 billion in 2014. As a percentage of GDP, the goods and services deficit was unchanged at 2.9%, a level about half the 5.7% reached in 2006.
- … While FTAs Add to Surplus … While the sectoral breakdown for 2015 isn’t yet available, data through November show the United States continues to run a trade surplus in manufactured goods with its FTA partners as a group. This surplus for manufactures again topped $50 billion in 2015 — roughly triple its 2010 level. While services data isn’t yet available, it appears that in 2015 the United States again ran an overall trade surplus with its 20 FTA partners.
- … As Do Services … While goods exports declined in 2015, U.S. services exports increased $5.9 billion to $716 billion. The top categories are travel, transport, charges for the use of intellectual property, and financial services sectors. The U.S. trade surplus in services was $227 billion, underscoring the competitiveness of U.S. service industries.
- … And the U.S. Energy Production Boom: U.S. net imports of petroleum continued their rapid decline. As Bloomberg reported, “the U.S. petroleum deficit, adjusted for changes in prices, was the lowest ever.” Crude oil imports decreased by $121 billion, and fuel oil imports fell by $17 billion. The U.S. evolution from being the world’s top energy importer to a potentially significant exporter is having a huge impact on the U.S. balance of trade and global energy markets.
- Americas First: Canada again edged the EU as the top market for U.S. goods exports in 2015, and the Americas purchased 44.5% of U.S. goods exports — a total nearly equal to the sum of U.S. exports to the Pacific Rim (24.6%) and Europe (21.3%). The nations of the Americas accounted for over half the increase in U.S. merchandise exports in the 2009-2014 period — twice East Asia’s contribution. Again, America’s extensive network of FTAs in the Western Hemisphere is an advantage.
- Transatlantic Ties Still Bind: As a single market, the EU remains America’s top trading partner (combining exports and imports) when services are included. While U.S. goods exports to the EU have risen by $52 billion over the past six years, the share purchased by the EU has fallen by about 3% in this period (and something similar is likely true for the EU as well). U.S. and EU leaders hope to reverse this trend through the proposed Transatlantic Trade and Investment Partnership.
- Most Imports from Middle Kingdom: China reaffirmed its position as the top source of U.S. goods imports in 2015 ($482 billion), and it ranks third as a national market for U.S. goods exports (after Canada and Mexico). Before the recent slowdown in China, U.S. goods exports to China and Hong Kong topped $165 billion in 2014, an increase of 82% from 2009 — the fastest pace of growth among the top 10 U.S. export markets. This underscores the long-term potential of the Chinese market for American companies.