California is one of the 10 largest economies in the world with a gross state product of over $2 trillion. International trade and investment are major parts of our economic engine that broadly benefit businesses, communities, consumers and state government. California’s economy is diverse, and the state’s prosperity is tied to exports and imports of both goods and services by California-based companies, to exports and imports through California’s transportation gateways, and to movement of human and capital resources.
Although trade is a nationally determined policy issue, its impact on California is immense. In 2017, California exported to 229 foreign markets. Trade offers the opportunity to expand the role of California’s exports. In its broadest terms, trade can literally feed the world and raise the living standards of those around us.
2017 Trade Statistics are available
Global Trade Facts
The projected world population on Jan. 1, 2018, is 7,444,443,881, an increase of 78,521,283, or 1.07 percent, from New Year’s Day 2017. During January 2018, 4.3 births and 1.8 deaths are expected worldwide every second. (U.S. Census Bureau, December 28, 2017)
IMF Raises 2017 Outlook for Global Economic Growth (The New York Times) in their April 2017 report the fund forecast a growth rate in 2017 of 3.5 percent, compared with 3.1 percent in 2016. Their raised outlook for global growth cites a post-election surge in confidence in the United States, better prospects in large emerging markets and an uptick in global trade.
According to the April 2017 World Trade Organization (WTO) report, world GDP grew slightly by 2.3% in 2016, which was reflected in the weak trade growth of just 1.3% in the same year. This was was partly due to cyclical factors as economic activity slowed across the board, but it also reflected deeper structural changes in the relationship between trade and economic output. However, global trade is expected to expand 2.4% in 2017 and to grow between 2.1% and 4% in 2018. The unpredictable direction of the global economy in the near term and the lack of clarity about government action on monetary, fiscal and trade policies raises the risk that trade activity will be stifled.
“Weak international trade growth in the last few years largely reflects continuing weakness in the global economy. Trade has the potential to strengthen global growth if the movement of goods and supply of services across borders remains largely unfettered. However, if policymakers attempt to address job losses at home with severe restrictions on imports, trade cannot help boost growth and may even constitute a drag on the recovery,” said WTO Director-General Roberto Azevêdo.
“Although trade does cause some economic dislocation in certain communities, its adverse effects should not be overstated – nor should they obscure its benefits in terms of growth, development and job creation. We should see trade as part of the solution to economic difficulties, not part of the problem. In fact, innovation, automation and new technologies are responsible for roughly 80% of the manufacturing jobs that have been lost and no one questions that technological advances benefit most people most of the time. The answer is therefore to pursue policies that reap the benefits from trade, while also applying horizontal solutions to unemployment which embraces better education and training and social programmes that can quickly help get workers back on their feet and ready to compete for the jobs of the future,” he said.
Global economic growth has been unbalanced since the financial crisis, but for the first time in several years all regions of the world economy should experience a synchronized upturn in 2017. This could reinforce growth and provide an additional boost to trade.
World Trade Outlook Indicator Suggests Moderate Trade Momentum in First Quarter of 2017
The WTO’s latest World Trade Outlook Indicator (WTOI) suggests that global trade growth will continue to build moderately in the first quarter of 2017 after having strengthened in the final quarter of last year. Trade-related indicators including air freight, automobile sales, export orders and container shipping have all registered solid gains in recent months, auguring for faster growth in merchandise trade volumes in the first few months of the year.
World Trade Organization, February 14, 2017
WTO launches new annual statistical publication
The WTO launched a new annual statistical publication — the “World Trade Statistical Review” — on 21 July. This new publication provides insights into how world trade has evolved in recent years by analyzing the latest trade statistics within an economic context.“World Trade Statistical Review” replaces the WTO’s previous annual statistical publication, “International Trade Statistics”
World Trade Organization, July 21, 2016
Jobs Attributable to Foreign Direct Investment in the United States
U.S. Department of Commerce, February 2016
Commerce Department Releases Reports Ranking Top Export Markets
U.S. Department of Commerce, May 24, 2016
U.S. Trade Facts
In 2017, combined goods and services imports hit nearly $2.9 trillion and services by itself $538 billion: food, feeds, and beverages ($137.8 billion); capital goods ($640.6 billion); automotive vehicles, parts, and engines ($359.0 billion); and consumer goods ($602.2 billion). The U.S. also had record imports from 47 countries in 2017, led by China ($505.6 billion), Mexico ($314 billion) and Italy ($50 billion).
In 2017, combined goods and services exports were the second-highest on record at $2.3 trillion. They also increased 5.6 percent from 2016. Exports of services alone hit a record $777.9 billion. The United States also had record exports to 29 countries, led by Mexico ($243 billion), China ($130.4 billion), and the United Kingdom ($56.3 billion).
According to the World Bank, the United States is the world’s largest economy with a GDP of $17.9 trillion. The population of the U.S. is expected to reach 326,971,407 on Jan. 1, 2018. This represents an increase of 2,314,238, or 0.71 percent, from New Year’s Day 2017. Since Census Day (April 1) 2010, the population has grown by 18,225,587, or 5.90 percent. (U.S. Census Bureau, December 28, 2017)
For every $1 appropriated to U.S. Commercial Service in Fiscal Year 2016, an estimated $192 was returned to the American economy in the form of increased exports ($56.2 billion) and foreign direct investment ($5.3 billion), which supported approximately 300,000 U.S. jobs.
From 2010 to 2016, U.S. Commercial Service assistance played a significant role in helping U.S. companies and localities achieve over $300 billion in U.S. exports and over $23 billion in foreign direct investment – supporting an estimated 1.7 million American jobs.
The largest export markets for U.S. goods in 2017 were Canada ($282.5 billion, up 5.8%), Mexico ($243 billion, up 4.9%), China ($130.37, up 12.6%), and Japan ($67.695, an almost 7% increase).
In the U.S. in 2017, expenditures by foreign direct investors to acquire, establish or expand U.S. businesses totaled $259.6 billion, down 32% from $379.7 in 2016. By industry the most expenditures were manufacturing and totaled $103.7 billion, accounting for 40% of the total, $34 billion of which was in the food manufacturing sector. There were also large expenditures in information ($25.7 billion) and in real estate, rental, and leasing ($17 billion). By country of ultimate beneficial owner, the largest investing country into the U.S. was Canada, followed by the United Kingdom, Japan and France; with Europe contributing 40% of the new investment in 2017. (Bureau of Economic Analysis)
Annual Summary for 2016
Source: Bureau of Economic Analysis – http://www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm
California Trade Facts
U.S. Department of Commerce reported that, in 2017, California exports amounted to $171.9 billion. This is an increase from the 2016 total of $163.5 billion. California maintained its perennial position as a top exporting state.
Exports from California accounted for 11 percent of total U.S. exports in 2017. California’s top export destinations are Mexico, Canada, China, Japan and Hong Kong. California trade and exports translate into high-paying jobs for over one million Californians.
In 2016, new foreign direct investment into California totaled $64.705 billion. In 2017, the largest foreign direct investment expenditures were in California, totaling $41.6 billion. California was also the third largest in terms of employment by newly acquired, established, or expanded foreign-owned businesses, employing a total of 55,700 people. Bureau of Economic Analysis
Top Export Sectors
California is a top exporter in the nation of computers, electronic products, transportation equipment, machinery except electrical, and miscellaneous manufactured commodities. Computers and electronic products are California’s top export, accounting for 25.4 percent of all the state’s exports.
According to a study conducted by Tech America in February 2014, California is the second largest tech exporting state after Texas.
Other top categories included agricultural products, chemicals, food manufactures, and electrical equipment.
According to a study conducted by the U.S. Bureau of Economic Analysis and the National Endowment for the Arts using 2011 data, creative industries led by Hollywood employ 2 million people and add about $504 billion to the U.S. GDP.
Hollywood, Creative Industries Add $504 Billion to U.S. GDP
Associated Press, December 5, 2013
Mexico continues to be California’s number one export market. California exports to Mexico increased to $26.7 billion in 2017, up from $25.26 billion in 2016. Mexico purchases 15.5 percent of all California exports.
California’s exports to Mexico are driven by computers and electronic products, which account for 22 percent of all California exports to Mexico. Other top categories included transportation equipment, machinery, except electrical, and chemicals.
Canada is California’s second largest export market, purchasing 9.7 percent of all California exports. In 2017, California exported over $16.7 billion to Canada.
Computers and electronic products remained California’s largest exports, accounting for 33.5 percent of all California exports to Canada.
California is the largest exporting state to Asia. In 2017, California exported $118.393 billion in goods to the region.
California exports to Mainland China totaled $16.4 billion in 2017. Computers and electronic products accounted for 26.6 percent of exports to China.
Exports to Hong Kong were $12.1 billion in 2017, maintaining Hong Kong’s spot as California’s number 5 export destination, just above South Korea.
California exports to Japan totaled $12.854 billion in 2017. Computers and electronic products accounted for 20.3 percent of total exports.
California exports to the European Union (28) totaled $31.296 billion in 2017. California is the top exporting state to Europe. Computers, electronic products, chemicals, transportation equipment, and miscellaneous manufactured commodities are our leading export sectors to the region. European Union countries purchase 18.2 percent of all California exports.
Export Totals from California
Is Globalization an Engine of Economic Development?
Our World Data, August 1, 2017
Jobs Supported by State Exports 2015
ITA, March 31, 2016
How States Benefit from Trade
Trade Benefits America, April 2016
California: Expanding Exports and Supporting Jobs through Trade Agreements
US Department of Commerce, February 26, 2015
California: Exports, Jobs, and Foreign Investment
ITA – April 2014
How California’s Economy Benefits from International Trade and Investment
U.S. Services Exports: California
Coalition of Services Industries, February 2015
Fast Facts on the California Economy
Compiled by: Assembly Committee on Jobs, Economic Development, and the Economy – 09/2013
- California & Metro Forecast Summary
University of the Pacific Eberhardt School of Business, January 2015
- California Capitol Region Export Plan
Released by the NorCal World Trade Center and a part of The Global Cities Initiative, a joint project of Brookings and JPMorgan Chase, January 28, 2015
- Cal Facts 2014
Legislative Analyst’s Office, December 2014
- Trade Supports Jobs
WTO Trade Statistics 2017 Editions
- California Dept of Finance – California Trade Data
- California Travel & Tourism Commission – International Travel Reports
- California Tourism Facts and Figures
- International Trade Administration – International Tourism and Travel
- Organization for International Investment
- Trade and American Competitiveness Coalition Statistics
- Trade Partnership Worldwide
- U.S. Bureau of Transportation Statistics
- U.S. Census Bureau Foreign Trade Statistics
- U.S. Department of Commerce – California Trade Stats
- US Department of Commerce -Small and Medium-Sized Exports by Market
- U.S. Department of Commerce – TradeStatsExpress
- U.S. Department of Commerce – U.S. Census Bureau Trade in Goods and Services (pdf)
- U.S. Department of Commerce – Trade and Economic Analysis
- U.S. Waterborne Import-Export Trade Data
- Wiser – Foreign Trade Database
- World Trade Organization – Country Trade Profiles