2019 State Export Report Goods and Services Exports by US States to China Over the Past Decade | 2019 2019 State Export Report Goods and Services Exports by US States to China Over the Past Decade May 2019 May 2019 Executive Summary The trade battles with China hit US goods exporters in 2018. Services exports increased, but at a slower pace than in previous years. Despite these challenges, China continued to be important to US economic growth, supporting more than 1.1 million jobs. China is the third-largest market for US goods and services exports. Despite trade friction and punitive tariffs, China remained a top market for US goods exports in 2018, with only NAFTA partners Canada and Mexico buying more goods last year. It was also the third-largest market for US services exports, after the United Kingdom and Canada. The world is waiting to see whether a trade agreement between the United States and China will address tariffs and other trade issues. A rollback of at least some of the tariffs imposed by both governments is expected, though it is not yet clear how many products will receive relief. In addition, China may reportedly commit to purchase additional US goods worth more than $1 trillion over the next six years. These factors may increase the volume of US goods exports to China in 2019. Goods Exports US goods exports to China declined in 2018, after breaking a record the previous year. In 2018, the United States exported $118.9 billion in goods to China, compared with an all-time high $127.9 billion in 2017. The seven percent, or $9 billion, decline is likely due to the trade conflict between the United States and China which resulted in retaliatory tariffs on an estimated 85 percent of US goods, including most agricultural products. Despite the decline, goods exports to China still outpaced export growth to the rest of the world over the last decade. US exports of goods to China increased 73 percent over the last decade, while exports to the rest of the world grew only 57 percent. $68.7 $90.4 $103.0 $108.9 $119.8 $121.4 $114.0 $113.8 $127.9 $118.9 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 US Goods Exports to China ($ billion) 1 May 2019 Services Exports Compared to previous years, US services exports to China grew more slowly in 2017, the latest year of full data, though they still outpaced services exports to other major markets. Services export growth to the rest of the world grew 2.7 percent faster than China that year. Over the last decade, however, US services exports to China grew significantly more rapidly than to the rest of the world 258 percent versus 49 percent. US Exports and US Jobs Exports to China support over 1.1 million American jobs. States across the country have jobs that are supported thanks to US exports to China, making trade important to not only US companies and consumers, but also US workers. US goods exports to China come from a wide range of industries including transportation equipment, semiconductors and oil and gas, sustaining logistics jobs in Americas ports and throughout the country. US services exports to China included travel and education, industrial processes, and management services, among other industries. States across the country feel the effects of the trade dispute Most states have seen significant increases in exports of goods and services to China in the past decade, though exports in the last year were downin some cases, significantly. Forty- eight states have increased their goods exports to China during the last decade, and all 50 states increased their services exports by triple digits. $15.7 $16.8 $22.2 $28.0 $32.5 $37.0 $43.7 $47.6 $53.7 $56.1 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 US Services Exports to China ($ billion) 2 May 2019 Growth in exports to China slowed due to trade disputes between the United States and China. Thirty-four states exported fewer goods to China in 2018 than they did in 2017, and another four states had only single-digit growth. Midwestern and Plains states that export significant quantities of soybeans and other agricultural products were hit particularly hard. In services, nine states exported less to China in 2017 than they did in 2016, and only one stateDelawarehad double-digit growth in services exports. Trade disputes also affected the overall value of exports to China. In 2017, 30 states exported more than $1 billion in goods to China; in 2018, only 26 states exported more than $1 billion in goods to China. For services, 15 states exported more than $1 billion to China in 2016 and 17 states exported more than $1 billion to China in 2017. Continued growth in services may be the result of services exports not being subject to tariffs. China is among the top five goods and services export markets for most states. China was the top goods export market for four states in 2018, and among the top five markets for 44 states. In services exports, China was the top market for 15 states in 2017, and a top five market for 49 states. Change in goods exports Annual goods exports by volume, 2017-2018 -$2B $0 $1B 3 May 2019 Methodology This years edition of the US-China Business Council (USCBC) State Exports Report uses data provided by The Trade Partnership, an economic research firm. The report provides a separate breakdown of each states goods and services exports to China. The national export totals include the export data for each state and for Washington, DC. Goods export figures are based primarily on data from the US Census Bureau, the US Department of Agriculture (USDA), and Moodys Analytics. Goods export figures are classified according to the US governments North American Industry Classification (NAICS) system. Services export figures are based primarily on data from the US Bureau of Economic Analysis (BEA) and Moodys Analytics. Services export figures are classified according to the BEA categories. This years edition of the State Exports Report uses the same sector categories for both goods and services as last years edition. Goods exports cover 2009-2018; services exports cover 2008-2017, the most recent year detailed services export data are available from BEA. As historical data from each of these sources is revised annually, this issue of the State Exports Report replaces all prior editions. Similar to previous editions of the State Exports Report, this report uses a methodology that credits agricultural exports to states where crops are grown as opposed to states with large ports where bulk commodities are aggregated prior to export. A detailed explanation of the methodology for jobs, goods, and services export estimates is available on The Trade Partnerships website. 4 May 2019 Sponsors 5 Source: Estimated by The Trade Partnership US Goods Exports to China ($ billion) Top Goods Export Markets, 2018 Top US Goods Exports to China, 2018 1. Canada $274.1 billion Aerospace Products & Parts $16.1 billion 2. Mexico $257.7 billion Semiconductors & Components $8.0 billion 3. China $118.9 billion Oil & Gas $7.2 billion 4. Japan $75.3 billion Motor Vehicles $6.3 billion 5. United Kingdom $60.5 billion Nav. & Meas. Instruments $6.1 billion $68.7 $90.4 $103.0 $108.9 $119.8 $121.4 $114.0 $113.8 $127.9 $118.9 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Growth in Total US Goods Exports, 2009 2018 Exports to China: 73.2% Exports to Rest of World 56.9% China is the United States third-largest goods export market 6 Source: Estimated by The Trade Partnership US Services Exports to China ($ billion) Note: Full-year services export data are available only through year-end 2017. Top Services Export Markets, 2017 Top US Services Exports to China, 2017 1. United Kingdom $69.4 billion 1. Travel $18.9 billion 2. Canada $57.9 billion 2. Travel (Education) $12.8 billion 3. China $56.1 billion 3. Industrial Processes $4.6 billion 4. Ireland $49.8 billion 4. Passenger Fares $2.5 billion 5. Japan $45.6 billion 5. Mgmt. and advisory services $1.9 billion Growth in Total US Services Exports, 2008 2017 Exports to China: 257.5% Exports to Rest of World 48.7% China is the United States third-largest services export market $15.7 $16.8 $22.2 $28.0 $32.5 $37.0 $43.7 $47.6 $53.7 $56.1 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 7Source: Estimated by The Trade Partnership Top US Goods Export Markets in 2018 Country Total ($ billion) Growth (2017-2018) Avg. Annual Growth (2009-2018) 1. Canada $274.1 0.1% 3.7% 2. Mexico $257.7 9.4% 8.4% 3. China $118.9 -7.0% 6.3% 4. Japan $75.3 14.4% 4.7% 5. United Kingdom $60.5 20.9% 4.1% 6. Korea, South $56.7 19.7% 8.2% 7. Germany $56.3 10.0% 3.4% 8. Netherlands $50.7 26.3% 5.5% 9. Brazil $38.9 7.3% 4.8% 10. Hong Kong $35.0 -7.0% 6.2% Despite trade disagreements with the United States, China continues to be an important market for US goods exports. China is currently the United States third-largest export market. In 2018, US goods exports to China totaled over $118 billion, down from $127 billion in 2017. US goods exports to China declined in 2018, down seven percent compared to 2017. US exports to China have grown faster over the last decade than exports to any other top US trade partner. Hong Kong is often a through point for US exports ultimately destined for China. This was reflected in the equal decline in exports to Hong Kong in 2018. In 2018, combined US exports to Hong Kong and China totaled $150.9 billion, down from a combined $165.3 in 2018. 8Source: Estimated by The Trade Partnership Top US Services Export Markets in 2017 Country Total ($ billion) Growth (2016-2017) Avg. Annual Growth (2008-2017) 1. United Kingdom $69.4 3.9% 1.7% 2. Canada $57.9 7.0% 2.9% 3. China $56.1 4.1% 15.2% 4. Ireland $49.8 2.5% 7.7% 5. Japan $45.6 2.7% 1.7% 6. Switzerland $37.2 12.2% 7.1% 7. UK Islands, Caribbean $34.5 6.8% 11.0% 8. Germany $32.5 2.5% 1.9% 9. Mexico $32.4 3.8% 2.5% 10. Brazil $26.2 9.6% 8.4% China is an important market for US services exports, though exports grew at a slower rate in 2017 than in previous years. China is currently the United States third-largest export market. In 2017, US services exports to China reached about $56 billion, up from $53 billion in 2016. Despite slowing growth in 2017, US services exports to China have grown faster over the last decade than exports to any other top US trade partner. US services exports include travel and education, transportation, business and professional services, and financial services, among other industries. Note: Full-year services export data are available only through year-end 2017. Data for UK Caribbean began to be reported in 2013. 9 Source: Estimated by The Trade Partnership Growth in US Goods Exports to Top 10 Markets, 2009-2018 Over the past decade, US exports to China have risen by 73 percent, making China a top purchaser of US goods. Goods exports to Hong Kong grew at about the same ratean indication that many exports ultimately destined for China first pass through Hong Kong. China remains the third-largest market for US goods exports behind Canada and Mexico, two countries with which the United States has a regional trade agreement. Of the top 10 US goods export markets, Mexico and South Korea experienced greater growth rates over the ten years between 2009 and 2018 than China did. In 2018, the top US goods exports to China included aerospace products and parts, semiconductors and components, and oil and gas. Note: Rankings are based on export data for 2009 and 2018, comparing the top 10 markets for US exports. “Rest of World” export growth for this page is calculated using the cumulative sums for US exports to all remaining markets (non-top-10) for those years. Double-digit growth for US goods exports to China 107% 104% 73% 71% 62% 53% 52% 44% 38% 36% 50% Mexico South Korea China Hong Kong Netherlands Brazil Japan United Kingdom Canada Germany RoW 10 Source: Estimated by The Trade Partnership Growth in US Services Exports to Top 10 Markets, 2008-2017 Over the past decade, US exports to China have risen by nearly 258 percent, making China a top purchaser of US services, though trade conflicts between the two nations have slowed the rate of growth. Over the ten-year period ending in 2016, US services exports to the rest of the world grew by 49 percent. Despite trade disagreements, US services exports to China grew at a higher annual rate than to any other market, growing almost 14 percent annually for the past decade. China is the third-largest services market for US exports, behind the United Kingdom and Canada. In 2017, the top US services exports to China included travel and education-related travel, industrial processes, passenger fares, and management and advisory services. Note: Rankings are based on export data for 2008 and 2017, comparing the top 10 markets for US exports. “Rest of World” export growth for this page is calculated using the cumulative sums for US exports to all remaining markets (non-top 10) for those years. Full-year services export data are available only through year-end 2017. US services exports to China are strong, but not immune to trade tension 257.5% 155.4% 106.8% 94.2% 85.2% 29.1% 24.5% 19.0% 16.3% 16.1% 50.9% China UK Islands, Caribbean Brazil Ireland Switzerland Canada Mexico Germany United Kingdom Japan World 11 May 2019 Chinas Top 5 Import Sources, 2018 ($ billion) The European Union, South Korea, Japan, and Taiwan all continue to export more goods to China than the United States, and those economies have benefitted from the trade tensions between the United States and China. Though US exports to China have grown significantly over the last decade, US imports to China in 2017 accounted for around 7.3 percent of Chinas total imports, compared to 13 percent from the European Union and 9.6 percent from South Korea. Trade disputes between the United States and China had an effect on US goods exports to China. Imports from the United States grew by only 0.75 percent between 2017 and 2018. By contrast, imports from South Korea increased by 15.3 percent, from Japan by 14.3 percent, and from the European Union by 11.7 percent. Note: Data for this chart are based on PRC government statistics. The value of PRC imports from the United States is higher than US exports to China because of several data discrepancies between US and PRC trade statistics, reflecting methodological differences regarding shipping costs, as well as tariffs that are applied as goods pass through other customs territories on their way to China. US trading partners benefitted from US-China trade tensions in 2018 $155.1 $177.6 $180.6 $204.6 $273.5 United States Taiwan Japan South Korea European Union 12