Trade Statistics

California is one of the 10 largest economies in the world with a gross state product more than $3.2 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 2023, California exported to 227 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.

According to the United Nations, global trade hit a record high of $32 trillion in 2022. However, trade slowed down in 2023 due to macroeconomic trends. Ongoing inflation, high interest rates, growing public debt, a precarious geopolitical environment, and U.S.-China decoupling have affected global trade in 2023. While there are some positive factors such as the growth in trade of environmentally friendly goods, improved outlook for major economies, falling shipping costs, and a high demand for services.

2023 Trade Statistics are available
through the International Trade Administration’s
“Trade Stats Express.”
In 2023, California exported $178.71 billion to 227 foreign economies.
California’s top export markets are
Mexico, Canada, China, Japan and South Korea.

U.S. International Trade in Goods and Services, March 2024
Bureau of Economic Analysis, May 2, 2024

International Activities

Global Trade Facts

The world population as of August 2024 is 8.01 billion people. As of January 2023, births were expected to rise to 4.3 births and 2.0 deaths are expected worldwide every second in 2024. (U.S. Census Bureau, February 2023)

In 2023, the World Trade Organization saw merchandise trade slump by 1.2 percent after growing by 3 percent the year prior, with many countries facing increased energy costs and inflation as the causes. These costs reduced real incomes for households, and increased business costs such as production and borrowing. This decline was slightly offset by the resilient growth in the services trade sector, which increased by 9 percent globally and is mostly attributed to the growth in tourism since the end of the Covid-19 pandemic.

The WTO recognized that despite the pandemic, trade tensions, and political uncertainty in many parts of the world, that world trade has continued to be strong. Goods and services trade saw a $30.4 trillion high with merchandise trade up by 6 percent compared to their pre-pandemic levels in 2019. They expect goods trade to continue to recover moderately in 2024 and 2025, as inflation eases, and household incomes are lifted.

The WTO’s forecast of merchandise trade is expected to increase by 2.7 percent in 2024 and 3 percent in 2025, with demand for traded goods being weaker than expected in Europe, but stronger in Asia. Commercial services, digitally delivered services, also see a positive outlook as they have risen at about 51 percent between 2019- 2025. World real GDP growth is expected to remain steady at 2.7% between 2023 and 2025, output is expected to be highest in Asia, where it is expected to climb 4 percent, while Europe has been marked as the slowest growing region, with output projected to be around 1.1 percent.

There are large risks to this forecast, with their outlook report noting rising protectionism, monetary policy divergence, and increasing geopolitical tensions and regional conflict, specifically in Europe and the Middle East. These conflicts have been observed to creating increasing signs of fragmentation in trade flows, and policymakers approach to these, whether too aggressive or too cautious, can either create economic slowdown or risk a return to rising inflation. Other risks noted were price shocks and climate related weather incidents.

Despite this, inflation had fallen by the middle of 2024, which saw central banks cutting interest rates. This should boost consumer spending and raise real household incomes. This should also raise investment spending by firms.

The IMF similarly projects the world economy to grow with a slightly higher projection for 2024 of 3.2 percent, and by 3.3 percent in 2025, with growth remaining stable. Services inflation is holding progress on disinflation, which in turn is holding the process of bringing monetary policy back to normalcy. Due to this, interest rates around the world are still higher for a longer period of time. The IMF does forecast a decline in global inflation, from 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025, and for it to gradually decline in the next few years. Developed and advanced economies will see these goals quickly, whereas developing and less advanced economies will see a slower realization of these projections.

The IMF, similar to the WTO, sees geoeconomic fragmentation as posing a risk to the global economy which could have macroeconomic consequences, specifically for the climate transition. Like the WTO, in their report they also noted risks such as increased political uncertainty and trade tensions, which can also have far reaching effects on global inflation/disinflation, as well as monetary policy as a whole. Economic policy also could see large swings as elections around the world have been seeing increasing uncertainty. Trade tariffs and embrace of industrial policies worldwide can lead to further fragmentation geoeconomically and retaliation depending on the entity.

The IMF believes that multilateral cooperation can help ensure better growth outcomes, as well as prevent geoeconomic fragmentation. Recommending that countries should avoid policies that contravene WTO rules and manipulate international commerce.

World Trade Statistical Review

U.S. Trade Facts

In 2023, combined goods and services exports totaled $3.05 trillion, with goods totaling $2.05 trillion and services totaling $1 trillion individually. In 2023 services saw a surplus of $288.2 billion, which was the highest since 2019.

In 2023, combined goods and services imports totaled $3.83 trillion, individually goods imports totaled $3.11 trillion, and imports of services totaled $714.5 billion.

The increases in both exports and imports reflected increases in all major components, led by transportation equipment, chemicals, computer and electronic products, and oil and gas.

As a percentage of U.S. gross domestic product, the current-account deficit decreased by $177.8 billion, or 18.7 percent, to $773.4 billion for 2023. The deficit was 2.8 percent of current-dollar GDP, down from 3.7 percent in 2022. (Bureau of Economic Analysis)

The United States is the world’s largest economy with a GDP of $27.96 trillion in 2023, according to the Bureau of Economic Analysis. The population of the U.S. is approximately 334.9 million as of September 2023.

The U.S. Commercial Service, a branch of the U.S. International Trade Administration, reported $126 billion in U.S. export revenue through their services as of 2023, with more than 100 facilities in over 80 countries worldwide to help with exporting needs for small to medium-sized businesses. With around 92,000 clients with a $2.2 million average client annual revenue growth, they helped to support over 595,000 U.S. jobs.

A 2020 study from the Business Roundtable reported that more than 40 million, or 1-in-5, jobs in the U.S. stem from international trade practices. The number of U.S. jobs that depend on international trade has more than doubled since NAFTA’s inception in 1992, reaching 20% in 2018.

The largest export markets for U.S. goods in 2023 were Canada ($354.36 billion), Mexico ($322.74 billion), China ($147.78 billion), Netherlands ($81.31 billion), and Germany ($76.7 billion).

Until just a few years ago, China was easily the largest U.S. trading partner, where individual countries were concerned. But it’s fallen to third place behind Mexico and Canada, as the result of the increased trade friction that began in the Trump administration and prompted companies to diversify their supply chains. The 27 nations of the European Union can also collectively stake a claim to being the largest U.S. trading partner, with Germany the fifth largest just by itself.

In the U.S. in 2023, according to the Bureau of Economic Analysis, expenditures by foreign direct investors to acquire, establish, or expand U.S. businesses totaled $148.8 billion, a decrease of $57.4 billion (28%) from 2022 revised total of $206.2 billion, and below the annual average of $265.6 billion from 2014-2022.

By industry the largest amounts were in transportation and warehousing, but these values are suppressed due to confidentiality requirements. The manufacturing sector came in at $42.9 billion and had accounted for 28.8% of total expenditures. In the manufacturing category, expenditures were the largest in chemical manufacturing ($17.8 billion) and electrical equipment, appliances, and components ($6.6 billion). Also, notable expenditures were in professional, scientific, and technical services ($16.0 billion). BEA

By country of ultimate beneficial owner (UBO), the largest investing country was Canada, with expenditures of $53.4 billion. Japan ($14.6 billion) was the second-largest investing country, followed by Sweden ($8.4 billion). By region, Europe contributed 33.8 percent of new investment in 2023.

By state, in 2023, California had received the second largest expenditures totaling $12.8 billion. In 2021, California received the most investment, totaling $64.1 billion. (Bureau of Economic Analysis)

Statistics released in August of 2024 showed employment in the United States by U.S. parent companies increased 2.5% to 30.2 million workers in 2022. U.S. parent companies accounted for 22.6 % of total private industry employment in the U.S. in 2022, below the 23.1% in 2021. Employment by U.S. parents was largest in manufacturing, in retail trade, and in “other industries,” which had transportation and warehousing leading. Total value added by majority-owned foreign affiliates was largest in the United Kingdom, Canada, and Ireland. (Bureau of Economic Analysis)

For more info on international trade in goods and service.
Source: Bureau of Economic Analysis

California Trade Facts

The U.S. Department of Commerce reported that, in 2023, California goods exports amounted to $178.717 billion. This was a decrease of roughly 3.97% from the previous year’s total of $186.2 billion, according to the U.S. Department of Commerce statistics.

In 2023, exports to FTA markets accounted for 44.01% of California exports. California exports to FTA partners totaled $78.69 billion in 2023. (ITA)

Goods exports from California accounted for roughly 8.7% of total U.S. goods exports in 2023. California exports translate into jobs for around 584,000 Californians, which can pay up to an estimated 18 percent above the national average according to the United States Trade Representative.

In 2023, there were an estimated 18,484 foreign-owned enterprises (FOEs) operating in California, employing 800,084 residents, amounting to $84.2 billion in wages. Top sources of FDI by foreign-owned enterprises were the United Kingdom, Japan, France, Canada, Germany, and Switzerland. The top industry sectors for FOEs were natural resources, construction, manufacturing, wholesale trade, retail trade, and transportation/warehousing/utilities. (LAEDC)

Top Export Sectors

California is one of the top exporters in the nation of computers and electronic products, transportation equipment, non-electrical machinery, chemicals, and agricultural products. Computers and electronic products are California’s top exports coming in at $41.1 billion.

Mexico

Mexico continues to be California’s No. 1 export market. California exports totaled $33.26 billion in 2023. Exports increased by 8.03% compared to 2022. Mexico purchases 18.6% of all California exports.

California’s exports to Mexico are driven by computers and electronic products, which account for 17.5% of all California exports to Mexico. Other top categories included transportation equipment, chemicals and non-electrical machinery.

Canada

Canada is California’s second largest export market, purchasing 10.7% of all California exports. In 2023, California exported more than $19.07 billion to Canada. Exports to Canada decreased by 7.35% in 2023 compared to 2022.

Computers and electronic products remained California’s largest exports, accounting for 26.4% of all California exports to Canada.

Asia

California is the second largest exporting state to Asia, after Texas. In 2023, California exported $69.827 billion in goods to the region.

Greater China

California exports to Mainland China totaled $16.87 billion in 2023, a 7.05% decrease from the year before. Computers and electronic products were the largest export to China accounting for 22% of exports.

Exports to Hong Kong were $5.59 billion in 2023, an increase of 0.54% from the previous year. Hong Kong was California’s 10th largest export market.

Japan

California exports to Japan totaled $10.62 billion in 2023. Exports decreased by 8.73% between 2022 and 2023. Computers and electronic products accounted for 19.1% of total exports.

South Korea

South Korea maintained the spot of California’s No. 5 trading partner as California exported $9.39 billion in 2023, a 18.85% decrease compared to 2022. Over 25.2% was made up of non-electrical machinery.

European Union

California exports to the European Union (excluding the UK) totaled $25.7 billion in 2023. California is a second-top exporting state to Europe.

Computers and electronic products, chemicals, agricultural products, and miscellaneous manufactures are California’s leading export sectors to the region. European Union countries purchase about 14.4% of all California exports.

Export Totals from California

In 2023, California exported $178.717 billion to 227 foreign economies. California’s top export markets are Mexico, Canada, China, Japan and South Korea.

(Source: ITA TradeStats Express, U.S. Department of Commerce.)

Import Totals from California

In 2023, California imported $449.485 billion worth of goods from the world. California’s top sources of imports are China, Mexico, Taiwan, Vietnam and Japan.