Wednesday’s RealityChek post showed that, although in 2019, the United States made significant progress in curbing the growth of its chronic and massive trade deficits, the sectoral makeup of those deficits (and the group of industries that ran surpluses) changed significantly only in terms of those parts of the economy whose trade balances improved and worsened the most year-on-year. (The post only covered goods trade, as will this one, since detailed data for services industries isn’t yet available.)
Indeed, compared with the trade flows of 2016 (the final year of the Obama administration, and therefore the final year of a multi-decade U.S. trade policy status quo that President Trump is trying to overturn), the industries that dominated last year’s list of sectors with the biggest trade surpluses and deficits stayed practically the same – including in ranking. But the list of sectors whose trade balances changed the most for good or ill saw almost complete turnover.
Today’s post examines the export and import figures as such (rather than the deficits and surpluses) to see if the same trends have unfolded. And the overall picture looks pretty similar. The biggest difference is that there was somewhat less turnover between the 2016 and 2019 lists of industries with the fastest import and export growth than between the 2016 and 2019 lists of industries with the fastest changes in trade deficits and trade surpluses.
Let’s lead off with the Top 20 exporting industries. As with the trade surplus lists presented yesterday, these industry categories come from the now-standard U.S. government system for slicing and dicing the nation’s economy – the North American Industry Classification System (NAICS). And the categories are those comprising NAICS’ most granular level of disaggregation – the 6-digit level.
In addition, this export list and the list of the fastest export growers leaves out an aerospace category that, due to reporting limitations, lumps together aircraft and their parts and components – figures that can be highly misleading in an era where those goods are often produced both in the United States and abroad. (You will, however, notice other aerospace categories that purport to distinguish between the finished good and its parts. Even though they don’t seem to track with the numbers provided for that catch-all aerospace category, I’m including them anyway where they come up.)
A final anomaly: Although trade figures are provided by the government for a (combined) crude oil and natural gas category for 2016 (and years before), this sector disappears in 2018 and 2019. And it’s not clear what, if anything has replaced it. Given the big recent swings in America’s energy trade, that’s anything but a trivial omission.
And now the list of Top 20 exporters, in descending order of export value. In the right-hand column, you’ll see where these same industries ranked in the Top 20 in 2016.
Leading 2019 export sectors 2016 rank
(including annual percentage change)
1. petroleum refinery products: -9.9 percent 1
2. special classification goods: +5.2 percent 4
3. semiconductors: +3.8 percent 3
4. autos and light duty trucks:: +9.3 percent 2
5. broadcast & wireless communs equip: -6.4 percent 5
6. misc basic organic chemicals: -5.5 percent 7
7. plastics materials & resins: -1.0 percent 9
8. jewelry & silverware: -8.5 percent 6
9. pharmaceutical preparations: +14.4 percent 8
10. computer parts: -6.5 percent 10
11. non-diagnostic biological products: +11.5 percent 13
12. used or second-hand merchandise: -3.8 percent 14
13. waste and scrap: -4.9 percent 16
14. surgical and medical instruments: +3.5 percent 15
15. soybeans: +9.1 percent 12
16. non-poultry meat products: -0.2 percent 18
17.semiconductor machinery: -14.9 percent 19
18. misc motor vehicle parts: -4.7 percent 17
19. misc basic inorganic chemicals: -2.8 percent –
20. construction machinery: -6.9 percent –
Just like the list of the Top 20 trade deficit and trade surplus industries, the 2016 and 2019 lists of top exporters are very similar. Not even the specific rankings have changed very much, with the exceptions of waste and scrap (which moved from 16th place in 2016 to 13th place in 2019) and soybeans (which fell from twelfth place in 2016 to 15th place last year).
The soybean results of course are interesting for another reason: They clearly stem in part from tariffs placed on them by recent mega-customer China in 2018 following Mr. Trump’s early trade war levies. Beijing didn’t begin resuming short-term purchases until last summer, and greatly boosted purchases beginning last fall, as negotiations leading to the eventual Phase One trade deal continued.
Also of interest – despite the retaliatory tariffs by China and other countries, 15 of these top 20 exports in 2019 were manufactured products, a slightly higher percentage than the 14 of 20 in pre-trade war 2016.
The patterns were rather different for export growth. Below are the Top 20 for 2019. As with the trade balance change figures from yesterday, these are drawn from the hundred biggest export industries, to avoid the “law of small numbers” problem. They leave out that catch-all aerospace sector, too.
Leading 2018-19 export growers 2016 rank
1. aircraft: +122.2 percent 1
2. oil & gas field mach & equip: +27.7 percent –
3. wheat: +14.8 percent –
4. petrochemicals: +14.6 percent –
5. pharmaceutical preparations: +14.4 percent –
6. light trucks and utility vehicles: +13.7 percent 6
7. aircraft parts & auxiliary equip: +11.8 percent 15
8. non-diagnostic biological products: +11.5 percent 8
9. misc non-ferrous metals extruding: +11.3 percent –
10. dried, condensed, evap dairy products: +11.3 percent –
11. search, detection, navigation devices: +9.9 percent 17
12. autos & light trucks: +9.3 percent –
13. soybeans: +9.1 percent 2
14. tree nuts: +8.4 percent –
15. surgical appliances & supplies: +7.9 percent –
16. misc foods: +5.7 percent 12
17. motors & generators: +5.4 percent –
18. turbines & turbine generator sets: +5.2 percent (t) –
18. other special classification items: +5.2 percent (t) –
19. electromedical devices: +5.1 percent (t) –
19. in vitro diagnostic substances: 5.1 percent (t) 10
20. opthalmic goods: +4.7 percent –
The difference with the list of top exporters is clear, as there’s much less overlap with this group of industries and its 2016 counterparts. At the same time, another noteworthy difference deserves attention: There’s significantly more overlap between these two lists of exporters than between the list of top trade surplus industries and biggest trade balance improvers, or than between the lists of top importing industries and sectors whose trade balances worsened the most.
The overlap above consists of seven of the twenty sectors found on each list. Moreover, three of these seven made significant moves in the rankings (both up and down): soybeans (way down); search, detection, and navigation devices; and aircraft parts and auxiliary equipment (both up considerably).
By contrast, only four industries appeared on both the list of the biggest trade balance “improver” industries for 2016 and for 2019.
The numbers also contain good news for the President’s objective of boosting domestic manufacturing: In 2019, 18 of 22 of the biggest export growers were manufacturing sectors – up from 16 of 23 in 2016 (counting industries whose export growth rates were tied).
The same kinds of developments generally appear on the import side. Below is a table showing the Top 20 importing industries (again, drawn from the top hundred importing industries and excluding the catch-all aerospace sector, and with their 2016 ranking in the right-hand column).
Leading 2019 import sectors 2016 rank
(including annual percentage change)
1. autos & light trucks: +1.1 percent 1
2. broadcast & wireless communs: -8.4 percent 2
3. pharmaceutical preparations: +12.3 percent 4
4. goods returned: +13.4 percent 5
5. computers: $73.68b 6
6. petroleum refinery products: -0.8 percent 9
7. female cut & sew apparel: -1.7 percent 8
8. non-diagnostic biological products: +15.8 percent 19
9. semiconductors: -4.9 percent 7
10. misc motor vehicle parts: -1.9 percent 11
11. misc basic organic chemicals: -6.8 percent 13
12. jewelry & silverware: -11.6 percent 10
13. male cut & sew apparel: +4.0 percent 15
14. audio & video equipment: -2.5 percent 12
15. non-aluminum, non-ferrous metal smelting, refining: -3.1 percent 14
16. aircraft engines & engine parts: +18.2 percent –
17. iron & steel & ferroalloy products: -20.00 percent 17
18. footwear: +2.1 percent 16
19. light trucks & utility vehicles: +16.7 percent –
20. misc plastics products: +3.8 percent –
Major overlap comes through loud and clear between the 2016 and 2019 lists, and only non-diagnostic biological products made a significant move (way up).
Here, however, the manufacturing news wasn’t as good for Trump-World or for the American economy (if you believe, as you should, that a strong manufacturing sector is crucial for sustainable prosperity). In 2016, 17 of the 20 biggest importing industries were in manufacturing. In 2019, this number rose to 19.
Leading 2018-19 import growers 2016 rank
1. aircraft engines & engine parts: +18.2 percent –
2. light trucks & utility vehicles: +16.7 percent 4
3. non-diagnostic biological products: +15.8 percent 3
4. aircraft: +15.2 percent –
5. goods returned: +13.4 percent –
6. pharmaceutical preparations: +12.3 percent –
7. surgical & medical instruments: +11.0 percent 10
8. misc electrical equipment & components: +10.1 percent –
9. construction machinery: +8.9 percent –
10. bread & bakery products: +7.6 percent –
11. distilled liquors: +7.4 percent –
12. surgical appliances & supplies: +7.0 percent –
13. non-potato vegetables and melons: +6.3 percent 7
14. aircraft parts & auxiliary equip: +5.6 percent –
15. electromedical apparatus: +5.1 percent (t) –
15. sporting & athletic goods: +5.1 percent (t) –
15. relays & industrial controls: +5.1 percent (t) –
16. misc manufactures: +4.5 percent (t) 20
16. wines, brandy & brandy spirits: +4.5 percent (t) 16
17. semiconductor machinery: +4.4 percent –
18. misc measuring & controlling devices: +4.2 percent –
19. male cut & sew apparel: +4.0 percent –
20. non-poultry meat products: +3.9 percent –
There’s much less overlap between this list and its 2016 counterpart than between the 2019 top importers list and its 2016 counterpart. But whereas the 2016 lists of top importers and top trade balance “worseners” had only three sectors in common, the 2019 lists have six sectors in common. And three of them (miscellaneous manufactures, vegetables and melons except for potatoes, and surgical and medical instruments) shifted significantly in the rankings.
Again, however, no improvement came about from a manufacturing standpoint. In 2016, 18 of the 20 industries whose trade balances deteriorated the most were found in manufacturing. In 2019, the figure was 20 of 23.
The trade landscape of course will change dramatically this year. An agreement with China expressly providing for massive increases in U.S. exports has been signed, as has an updated version of the North American Free Trade Agreement (NAFTA). At the same time, stiff tariffs on hundreds of billions of dollars worth of prospective imports from China remain in place, along with levies on steel and aluminum imports from numerous major foreign producers.
In other words, the next few years could speak volumes about whether a New (and better) Normal has set in for U.S. trade flows both at the macro- and micro-economic levels, or not.