California is one of the 10 largest economies in the world with a gross state product of $3 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 2022, 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 is expected to slowdown in 2023 due to macroeconomic trends. Ongoing inflation, high interest rates, growing public debt, a precarious geopolitical environment, and US-China decoupling are expected to effect 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.
2022 Trade Statistics are available
|Monthly U.S. International Trade in Goods and Services, December 2021
Bureau of Economic Analysis, February 8, 2022
Global Trade Facts
The world population as of January 2023 is 7.95 billion people. As of January 2019, 4.3 births and 1.9 deaths are expected worldwide every second. (U.S. Census Bureau, February 2019)
In April 2023, the World Trade Organization projected that global trade will slow to 1.7% growth in 2023 following a 2.7% expansion in 2022. Global trade is being weighed down by the effects of the war in Ukraine, stubbornly high inflation, tighter monetary policy and financial market uncertainty.
As of now, the WTO expects trade growth to rebound in 2024 to 3.2%, but is more uncertain than usual due to the continued presence of substantial downside risks, including geopolitical tensions, food supply shocks, and the possibility of unforeseen fallout from monetary tightening.
In February 2023, the World Trade Organization reported that global trade had remained resilient performed better than expected in 2022 as economies greatly affected by the war in Ukraine found alternative sources of supply. With the stability of global trade also evident in global supply chains, confirmed by the 4% year-on-year growth of trade in intermediate goods in the second quarter of 2022.
In October 2022, the World Trade Organization forecasted world trade to lose momentum in the second half of 2022 and remain subdued in 2023 due to multiple shocks as import demand is expected to soften while Europe deals with high energy prices from the Russia-Ukraine war, monetary policy tightens in the U.S., China continues with its Zero Covic policy, and the threat of food insecurity and debt plagues developing countries.
World merchandise trade is now expected to grow by 3.5% in 2022 and slow to 1.0% growth in 2023, revised down from 3.4%. The WTO forecast estimates that world GDP will grow by 2.8% in 2022 and 2.3% in 2023. If this current forecast is realized, trade growth will slow sharply but remain positive in 2023.
The WTO predicts the Middle East will have the strongest trade volume growth of any region in 2022 on both the export side (14.6%) and the import side (11.1%). Africa has also shown resilient trade growth. Global energy prices rose 78% year-on-year in August while food prices were up 11%, grain prices were up 15% and fertilizer prices were up 60%. Food prices have also risen sharply as Ukraine is a major exporter for fertilizer and grains.
Risks to the WTO forecast include banks raising interest rates while aiming to tamp down inflation, but they could overshoot and trigger a recession, which would affect imports. Escalation of the Russia-Ukraine war could also destabilize the global economy. The WTO also notes the underappreciated risk of decoupling of major economies from global supply chains which would exacerbate supply shortages in the near term and reduce productivity over the longer term.
U.S. Trade Facts
In 2022, combined goods and services imports totaled $3.96 trillion, with goods totaling $3.28 trillion and services totaling $680.3 billion individually.
In 2020, combined goods and services exports totaled $3.016 trillion, individually goods exports totaled $2.09 trillion and exports of services totaled $926 billion.
The increases in both exports and imports reflected increases in all major components, led by industrial supplies and materials, mainly petroleum and products.
As a percentage of U.S. gross domestic product, the current-account deficit widened by $97.4 billion, or 11.5 percent, to $943.8 billion in 2022. The deficit was 3.7 percent of current-dollar GDP, up from 3.6 percent in 2021. (Bureau of Economic Analysis)
The United States is the world’s largest economy with a GDP of $25.46 trillion in 2022, according to the Bureau of Economic Analysis. The population of the U.S. is approximately 334.5 million as of March 2023.
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.
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 2022 were Canada ($354.9 billion), Mexico ($324.378 billion), China ($153.837), Japan ($80.317), and the United Kingdom ($77.301).
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 fourth largest just by itself.
In the U.S. in 2021, according to the Bureau of Economic Analysis, expenditures by foreign direct investors to to acquire, establish, or expand U.S. businesses totaled $333.6 billion, an increase of $192.2 billion from 2020 and above the annual average of $289.7 billion from 2014-2020. By industry, expenditures for new direct investment were largest in manufacturing, at $121.3 billion, accounting for 36.4% of total expenditures. Within manufacturing, expenditures were largest in chemical manufacturing ($63.2 billion) and computers and electronic products ($30.2 billion). There were also notable expenditures in the real estate and rental and leasing sector ($43.8 billion).
By country of ultimate beneficial owner (UBO), the largest investing country was the United Kingdom, with expenditures of $59.7 billion. The Netherlands ($43.1 billion) was the second-largest investing country, followed by France ($35.3 billion). By region, Europe contributed 70.0 percent of new investment in 2021.
By state, California received the most investment, totaling $64.1 billion in 2021. In 2020, California had received the second largest expenditures totaling $17.8 billion. (Bureau of Economic Analysis)
Statistics released in August 2021 showed that majority owned U.S. affiliates (MOUSAs) of foreign multinational enterprises employed 7.95 million workers in the U.S. in 2019, which is a 1.1% increase from 2018. Majority owned U.S. affiliates accounted for 6% of total private-industry employment in the U.S. Employment by MOUSAs was largest in the manufacturing and retail trade sectors. MOUSAs with ultimate beneficial owners in the United Kingdom, Japan, and Canada were the largest contributors to total MOUSA employment. (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 2022, California exports amounted to $185.55 billion. This was an increase of 6.07% from the previous year’s total of $174.9 billion, according to the U.S. Department of Commerce statistics.
In 2022, exports to FTA markets accounted for 43.3% of California exports. California exports to FTA partners totaled $80.49 billion in 2022. (ITA)
Exports from California accounted for 9% of total U.S. exports in 2022. California exports translate into high-paying jobs for more than 1 million Californians. International trade, including exports and imports, supports more than 5 million California jobs – which translates to 1 in 4 jobs.
In 2020, there were an estimated 18,451 foreign-owned enterprises (FOEs) operating in California, employing 703,187 residents, amounting to $64 billion in wages. Top sources of FDI by foreign-owned enterprises were: Japan (16.4%), the United Kingdom (14.3%), France (9.6%), Germany (8.5%), and Switzerland (7.8%). The top industry sectors for FOEs were manufacturing, professional/business services, wholesale trade, retail trade, and financial activities. (LAEDC)
Top Export Sectors
California is a top exporter in the nation of computers, non-electrical machinery, chemicals, transportation equipment, and agricultural products. Computers and electronic products are California’s top export, which increased by 4.86% to $41.59 billion in 2022.
According to a study by the Consumer Technology Association, in 2017 California had over three million jobs directly and indirectly attributable to consumer tech, many of which derive from consumer tech exports.
Other top exports included: nonelectrical machinery, which also increased by 7.69%, totaling $21.87 billion in 2022. While agricultural products and waste and scrap were the only export products in the top 10 that decreased from 2021 by 0.89% and 20.14%, respectively.
Mexico continues to be California’s No. 1 export market. California exports totaled $30.77 billion in 2022. Exports increased by 13.10% compared to 2021. Mexico purchases 16.5% of all California exports.
California’s exports to Mexico are driven by computers and electronic products, which account for 16.3% of all California exports to Mexico. Other top categories included transportation equipment, chemicals and non-electrical machinery.
Canada is California’s second largest export market, purchasing 10.8% of all California exports. In 2022, California exported more than $20.1 billion to Canada. Exports to Canada increased by 11.4% in 2022 compared to 2021.
Computers and electronic products remained California’s largest exports, accounting for 25% of all California exports to Canada.
California is the second largest exporting state to Asia, after Texas. In 2022, California exported $78.737 billion in goods to the region.
California exports to Mainland China totaled $18.15 billion in 2022, a 9.12% increase from the year before. Computers and electronic products was the largest export to China accounting for 22% of exports.
Exports to Hong Kong were $5.55 billion in 2022, a significant decrease of 17.73% from the previous year. Hong Kong was California’s 10th largest export market.
California exports to Japan totaled $11.607 billion in 2022. Exports decreased by 1.6% between 2021 and 2022. Computers and electronic products accounted for 18% of total exports.
South Korea maintained the spot of California’s No. 5 trading partner as California exported $11.58 billion in 2022, a 0.27% decrease compared to 2021. Over 30.5% was made up of non-electrical machinery.
California exports to the European Union (excluding the UK) totaled $26.945 billion in 2022. California is a 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 14.5% of all California exports.
Export Totals from California
War Dims Global Economic Outlook as Inflation Accelerates
International Monetary Foundation, April 19, 2022
World Bank Cuts 2022 Global Growth Outlook on Russia Invasion
Bloomberg, April 18, 2022
Global Economic Uncertainty, Surging Amid War, May Slow Growth
International Monetary Foundation, April 15, 2022
Trade and American Jobs: The Impact of Trade on U.S. and State-Level Employment: 2022 Update
Business Roundtable, February 2022
World Economic Outlook: A Long and Difficult Ascent
International Monetary Fund, October 2020
Trade and American Jobs: The Impact of Trade on U.S. and State-Level Employment: 2020 Update
Business Roundtable, October 2020
Preliminary Overview of the Economies of Latin America and the Caribbean
ECLAC, December 2019
Cato Institute Project on Jones Act Reform
Regulation: The Man Behind Trump’s Tariffs
CATO Institute, Fall 2018
Is Globalization an Engine of Economic Development?
Our World Data, August 1, 2017
Trade Policy Review: United States of America
WTO, December 2018
How California’s Economy Benefits from International Trade and Investment
U.S. Services Exports: California
Coalition of Services Industries, February 2015
WTO Trade Statistics 2019 Editions
- California Agriculture Export Data – CDFA & UC Davis
- California Dept of Finance – California Trade Data
- California Dept of Finance – Economic Indicators
- 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 Labor Statistics – California Economic Data
- U.S. Bureau of Transportation Statistics
- U.S. Census Bureau Foreign Trade Statistics
- U.S. Department of Agriculture – California Economic Data
- 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