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 2020, 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.
2020 Trade Statistics are available
Global Trade Facts
The projected world population as of 2020 is 7.8 billion people. During January 2019, 4.3 births and 1.9 deaths are expected worldwide every second. (U.S. Census Bureau, February 2019)
The WTO in their 2020 World Trade Report, took into account the coronavirus global pandemic which has caused unprecedented international uncertainty. Global trade experienced its worst downturn since the 1930s with a forecast that trade will have tumbled by 13% to 32% in 2020 compared to the previous year.
The report underscored the importance of international cooperation during this time to keep markets open for goods and services, as well as to safeguard public health and revive economic activity around the world. In the spring of 2020, Director General Roberto Azevêdo announced that he will be stepping down in August to allow a new Director General to be chosen before the 12th ministerial conference in 2021. Along with this change, the WTO is also undergoing discussions of reform with the goal amid the pandemic that the WTO will be able equipped to contribute to the economic recovery of all of its members.
As of February 2021, the WTO’s good barometer signaled a strong trade rebound after trade took a deep slump as a result of the COVID-19 pandemic. According to the barometer, expansion of trade in the first half of 2021 is expected to slow. Prospects for 2021 are uncertain due to the emergence of new variants of COVID-19 and effectiveness of vaccination efforts.
In March of 2021, the news continued to be good as the WTO estimates the volume of world merchandise trade is expected to crease by 8% in 2021 after falling by 5.3% in 2020. This has improved prospects for a quick recovery. Trade growth is then expected to slow to 4% in 2022. However, the pace of expansion is still below the pre-pandemic trend. (World Trade Organization, March 2021)
In 2019, world merchandise trade totaled $19.05 trillion USD, which represented a 3% decline. While, world trade in commercial services totaled $5.89 trillion USD, which represented a 22.1% increase. Trade in manufactured goods represented 70% of world merchandise exports.
U.S. Trade Facts
In 2020, combined goods and services imports totaled $2.81 trillion, with goods totaling $2.35 trillion and services totaling $460.1 billion individually. Imports most notably of automotive vehicles, parts and engines decreased by $65.2 billion, industrial supplies and material imports decreased by $42.3 billion, and imports of capital goods decreased by $31.2 billion. Imports of services for travel decreased by $95.3 billion and transport services decreased by $35.9 billion.
In 2020, combined goods and services exports totaled $2.131 trillion, individually goods exports totaled $1.434 trillion and exports of services decreased to $697.1 billion. Most notably, exports of capital goods including civilian aircraft decreased by $87.5 billion, exports of industrial supplies and materials decreased by $59.2 billion, automotive vehicles and parts also decreased by $35.3 billion, and consumer goods exports decreased by $30.8 billion. Exports of travel services decreased by $117.2 billion, while transport services exports decreased by $34.7 billion.
As a percentage of U.S. gross domestic product, the goods and services deficit was 3.2% in 2020, up from 2.7 percent in 2019. (Bureau of Economic Analysis)
The United States is the world’s largest economy with a GDP of $20.93 trillion, according to the Bureau of Economic Analysis. The population of the U.S. is approximately 330 million as of March 2021. Since Census Day (April 1) 2010, the population has grown by 6.87% to the March 2021 total.
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 2020 were Canada ($255.149 billion, a 12.8% decrease), Mexico ($212.671 billion, an 17.1% decrease), China ($126.648 billion, a 17.09% increase), Japan ($64.097, a 13.8% decrease), and the United Kingdom ($59.009, a 14.57% decrease).
In the U.S. in 2019, according to the Bureau of Economic Analysis, expenditures by foreign direct investors to to acquire, establish, or expand U.S. businesses totaled $194.7 billion, a decrease of 37.7% from $312.5 billion in 2018. By industry, expenditures for new direct investment were largest in manufacturing totaling $78.2 billion and accounting for 40.2% of total expenditures. Within manufacturing, expenditures were the largest in chemical manufacturing, primary pharmaceuticals and medicines. There were also large expenditures in transportation and warehousing and publishing industries.
By country of ultimate beneficial owner (UBO), the largest investing country into the U.S. was the United Kingdom totaling $40.4 billion, followed by Canada at $35.7 billion, Germany at $21.6 billion, and Japan at $17.8 billion. By region, Europe contributed over half of new investment in 2019.
By state, California received the top expenditures totaling $22.7 billion. (Bureau of Economic Analysis)
Statistics released in November 2019 showed that majority owned U.S. affiliates (MOUSAs) of foreign multinational enterprises employed 7.4 million workers in the U.S. in 2017, which is a 2.8% increase from 2016. Majority owned U.S. affiliates accounted for 5.8% 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 Germany were the largest contributors to total MOUSA employment. (Bureau of Economic Analysis)
Annual Summary for 2020
Source: Bureau of Economic Analysis
California Trade Facts
The U.S. Department of Commerce reported that, in 2020, California exports amounted to $156.112 billion. This is a decrease of 10.29% from the 2019 total of $174 billion.
In 2020, exports to FTA markets accounted for 40% of California exports. California exports to FTA partners totaled $62.82 billion in 2020. (ITA)
Exports from California accounted for 10.9% of total U.S. exports in 2020. California exports translate into high-paying jobs for more than 1 million Californians. International trade, including exports and imports, supports nearly 5 million California jobs – nearing 1 in 4 jobs.
In 2019 new foreign direct investment into California total expenditures reached $45.49 billion. Employment by newly acquired, established, or expanded foreign-owned businesses in 2019 reached 44,300 employees (Bureau of Economic Analysis). The top industry sectors for FDI in California were software & IT services, business services, communications, financial services, and industrial equipment. The top sources of FDI in California were made up of 20% from the United Kingdom, 9% from Germany, 8% from Canada, 7% from Japan, and 7% from China. (Select USA)
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 24.1% of all the state’s exports in 2020.
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 categories included transportation equipment and nonelectrical machinery making up 11.1% and 10.8% of total exports, respectively
Mexico continues to be California’s No. 1 export market. California exports to Mexico totaled $24.078 billion in 2020. Exports decreased by 13.895% compared to 2019. Mexico purchases 15.4% of all California exports.
California’s exports to Mexico are driven by computers and electronic products, which account for 22.4% of all California exports to Mexico. Other top categories included transportation equipment, electrical equipment, and non-electrical machinery.
Canada is California’s second largest export market, purchasing 10.19% of all California exports. In 2020, California exported more than $15.9 billion to Canada.
Computers and electronic products remained California’s largest exports, accounting for 28.1% of all California exports to Canada.
California is the second largest exporting state to Asia, after Texas. In 2020, California exported $105.6 billion in goods to the region.
California exports to Mainland China totaled $15.02 billion in 2020. Computers and electronic products accounted for 26.5% of exports to China.
Exports to Hong Kong were $6.3 billion in 2020, a decrease from $8.4 billion in 2019, moving down to California’s 8th largest export market.
California exports to Japan totaled $10.65 billion in 2020. Computers and electronic products accounted for 18.9% of total exports.
South Korea maintained the spot of California’s No. 5 trading partner as California exported $9.78 billion to South Korea in 2020. Over 28.8% was made up of non-electrical machinery.
California exports to the European Union (27) totaled $30.959 billion in 2020. California is a top exporting state to Europe.
Computers and electronic products, transportation equipment, chemicals, and agricultural products are California’s leading export sectors to the region. European Union countries purchase about 19.8% of all California exports.
Export Totals from California
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 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