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Electronic Products

Electronic Products

Changes in 2020 from 2019:

  • U.S. total exports of electronic products: Decreased by $19.6 billion (7.2 percent) to $253.2 billion
    • U.S. domestic exports of electronic products: Decreased by $13.1 billion (8.2 percent) to $146.5 billion
    • U.S. re-exports of electronic products: Decreased by $6.5 billion (5.7 percent) to $106.8 billion
  • U.S. general imports of electronic products: Decreased by $215 million (0.04 percent) to $483.7 billion

The value of U.S. domestic exports of electronic products[1] decreased by $13.1 billion (8.2 percent) to $146.5 billion from 2019 to 2020.[2] The decline in exports was due primarily to a decrease in exports of medical goods (down $2.6 billion); measuring, testing, and controlling instruments (down $2.4 billion); telecommunications equipment (down $2.0 billion); computers, peripherals, and parts (down $1.1 billion) and navigation instruments and remote control apparatus (down $876 million). U.S. domestic exports to Mexico posted the largest value decrease ($2.1 billion), while those to Hong Kong posted the largest decrease by percentage change (18.1 percent) (table EL.1). Of the seven largest destinations for U.S. electronic product exports, only China imported more in 2020 compared to 2019.[3]

The value of U.S. general imports of electronic products decreased by $215 million (0.04 percent) to $483.7 billion from 2019 to 2020. The decrease in imports was due primarily to a decrease in imports of telecommunications equipment (down $6.9 billion); medical goods (down $2.2 billion); measuring testing and controlling instruments (down $2.2 billion); and navigational instruments and remote-control apparatus (down $1.6 billion). There were, however, substantial increases in imports of computers, peripherals, and parts (up $15.2 billion) and blank and prerecorded media (up $3.6 billion). U.S. imports from China posted the largest decrease by value (down $6.1 billion), while imports from Vietnam posted the largest increase by value and percentage change (up $6.3 billion and 27.4 percent, respectively) (table EL.2).

Many factors related to the onset of the COVID-19 pandemic contributed to declines in both exports and imports of electronic products in 2020. These factors included reduced consumer spending on some electronics, the closing of factories due to COVID-19 outbreaks in various countries, and shipping delays in the latter half of 2020.[4]

U.S. Domestic Exports

Domestic exports of electronic products decreased by $13.0 billion (8.1 percent) to $146.7 billion in 2020 (table EL.2). The largest decrease in exports among digests in this sector was in medical goods, which decreased by $2.6 billion (7.5 percent) in 2020.[5] The decline primarily involved exports to Belgium, Brazil, and Japan. Within this digest, the largest declines in exports were in healthcare products like catheters, down $732 million or 14.1 percent[6] and surgical instruments and appliances, down $356 million or 6.3 percent.[7] The decline in exports of healthcare products may also have been partially due to U.S. restrictions on exports of certain medical goods early in the COVID-19 pandemic.[8] However, U.S. exports of other products covered by the digest—such as artificial respiration devices like ventilators, continuous positive airway pressure (CPAP) and bi-level positive airway pressure (BiPAP) machines—increased by $432 million or 47.0 percent.[9] The growth in these exports was likely driven by the need for increased supply during the COVID-19 pandemic—partially caused by the invocation by the president of the Defense Production Act to speed production of ventilators—and higher global demand.[10]

The next-largest decrease in exports was in measuring, testing, and controlling instruments,[11] which decreased by $2.4 billion (9.8 percent). This decrease primarily involved exports to Canada and Mexico. Within this digest, the largest declines in exports involved automatic regulating or controlling instruments which includes thermostats, down $490 million or 25.8 percent,[12] and surveying hydrographic, oceanographic, hydrological, meteorological, or geophysical instruments and appliances (nonoptical), down $269 million or (29.2 percent).[13] These declines were primarily due to lower industrial activity and supply chain disruptions during 2020 related to the COVID-19 pandemic.[14]

Exports of telecommunications equipment decreased by $2.0 billion (14.9 percent) from 2019 to 2020. The decline primarily involved exports to Canada, Hong Kong, Mexico, and the Netherlands. Within this digest, the largest decrease was in modems and routers, down $1.1 billion or 15.9 percent.[15] This was reportedly due to declining global demand and increased competition in foreign markets in recent—U.S. exports of this digest have decreased steadily since 2016—which was likely compounded by the onset of the COVID-19 pandemic.[16]

Exports of computers decreased by $1.1 billion (6.9 percent) from 2019 to 2020. The decline primarily involved exports to the Netherlands, the United Kingdom, and Germany. Within this digest, the largest decreases were in processing units[17] (down $607 million or 14.2 percent)[18] and magnetic or optical readers (down $298 million or 22.7 percent).[19]

Exports of navigational instruments and remote control apparatus posed the largest percentage change in exports, decreasing by 22.2 percent ($876 million). The decline primarily involved exports to Qatar, United Arab Emirates, Canada, and Switzerland. Within the navigational instruments and remote control apparatus digest, the largest decline was in radar apparatus, down $756 million (54.5 percent).[20] Exports to Middle Eastern countries like Qatar (down $312 million or 63.0 percent) and the United Arab Emirates (down $259 million or 78.6 percent) made up the largest declines within this digest. This was likely due to sporadic defense-related sales. For example, in 2018, the U.S. State Department cleared Qatar for the $3 billion purchase of 24 Boeing AH-64E Apache attack helicopters and related radar equipment, leading to an increase in exports in 2019 and a subsequent decline in 2020.[21]

The largest digest increase was in U.S. exports of semiconductors and integrated circuits, which increased by $675 million (2.5 percent), and primarily entailed exports to China, Taiwan, and Vietnam. Within this digest, the increase in exports was due to a single HTS subheading, 8542.31.00, which covers electronic integrated circuits, also known as “chips.” This HTS subheading saw an increase of $1.7 billion (12.7 percent) year over year.[22] The increase in this subheading was almost entirely exports to China ($1.5 of the $1.7 billion increase). The increase in exports of chips took place in the first half of 2020; in the second half of the year, global manufacturing shutdowns, supply chain disruptions, and market uncertainty due to the COVID-19 pandemic disrupted both supply and demand for these chips.

U.S. General Imports

U.S. imports of electronic products modestly decreased by $215 million (0.04 percent) to $483.7 billion (tables EL.2). The decrease was due primarily to a decline in imports of telecommunications equipment; medical goods; and measuring, testing, and controlling instruments. However, there were substantial increases in imports of computers, peripherals, and parts and blank and prerecorded media. Imports of electronic products from China posted the largest decrease by value ($6.1 billion or 3.7 percent), while imports from Vietnam posted the largest increase by value and percentage change ($6.3 billion, 27.4 percent). U.S. imports from Vietnam of electronic products likely increased because of a partial shift away from China, partially due to various trade actions put in place by the United States and China.[23]

U.S. imports of telecommunications equipment decreased by $6.9 billion (6.8 percent) in 2020. The decline primarily involved imports from China and South Korea. Within this digest, the largest decrease was in cellular phones, down $5.1 billion or 9.5 percent.[24] Certain telecommunications equipment, inputs, and finished goods imported from China remain subject to additional tariffs of 25 percent ad valorem[25] imposed in May 2019 under section 301 of the Trade Act of 1974.[26] Imports of cellular phones declined as demand fell due to the COVID-19 pandemic, and consumers restrained purchasing new phones in anticipation of new 5G cellular phone options.[27]

From 2019 to 2020, imports of navigational instruments and remote control apparatus decreased by $1.6 billion (24.5 percent) representing the second largest percentage change within the electronic products sector. The decrease primarily involved imports from China, France, and Mexico. Within this digest, the largest decreases were in radio navigational aid equipment and radars, down $746 million or 42.0 percent,[28] and radar, down $229 million or 18.2 percent.[29] Navigational instruments are primarily used to search, detect, record, and guide pilots and nautical navigators. Lower exports of these products occurred because of reduced aircraft production and order delays for new aircraft stemming from the COVID-19 pandemic and production declines of the Boeing 737 Max after several accidents.[30]

From 2019 to 2020, imports of computers, peripherals, and parts increased by $15.2 billion (12.0 percent). This increase primarily involved imports from China, Taiwan, Thailand, and South Korea. Within this digest, the largest increases were in laptop computers and processors, up $10.6 billion or 26.4 percent[31] and printed circuit board assemblies, up $4.2 billion or 29.4 percent.[32] Printed circuit board assemblies are used in a wide variety of electronic devices including computers, phones, televisions, consumer appliances, medical devices, and cloud computing servers.[33] The COVID-19 pandemic led to increased consumer demand for laptop computers to meet online schooling and working from home needs, as well as for new devices such as those needed to process contactless payments.[34]

From 2019 to 2020, imports of blank and prerecorded media increased by $3.6 billion (32.7 percent) representing the largest percentage change within the electronic products sector. The increase primarily involved imports from South Korea, Taiwan, and Malaysia. Within this digest, the largest increase was in nonvolatile semiconductor media storage, up $3.6 billion or 37.5 percent.[35] Nonvolatile  semiconductor media storage includes solid-state drives (SSDs) which are used in enterprise and personal computers, telephones, and digital cameras to store data.[36] The increase in imports of blank and prerecorded media was likely driven by an increase in purchases of computers as working from home and online learning were widely adopted due to the onset of the COVID-19 pandemic.[37]

Imports of semiconductors modestly increased by $832 million (1.9 percent) from 2019 to 2020. This increase, however, is somewhat misleading, as imports of one HTS subheading, 8541.40.60 (diodes for semiconductor devices), increased by $2.2 billion year over year.[38] The increase in diode imports was likely in response to recent investments in semiconductor fabrication plants in the United States, and facilities that increased their demand for various semiconductor parts.[39] Excluding this HTS subheading, the rest of the digest decreased by $1.4 billion, which is largely indicative of the global semiconductor chip shortage that originated as far back as February 2020.[40]

 

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[1] The Electronic Products sector consists of 25 product digests. Each USITC sector digest encompasses various 8-digit subheadings in the Harmonized Tariff Schedule of the United States (HTS). For a complete list of HTS subheadings classified in a particular sector or digest, see this data table.

[2] Except where otherwise noted, the export data used in this section are for domestic exports. For more information on trade terminology, please refer to USITC, “Special Topic: Trade Metrics,” Shifts in U.S. Merchandise Trade, 2014, June 2015.

[3] This coincides with U.S. total exports from China increasing in 2020. For more information, see Part I of this report.

[4] This section discusses shipping disruptions only as they relate to the electronic products sector. For more information on the shipping disruptions, or how they impacted other sectors, see Part III of this report.

[5] USITC DataWeb/Census, Digest EL022, accessed July 2, 2021.

[6] USITC DataWeb/Census, HTS subheading 9018.39.00, accessed July 1, 2021. HTS subheading 9018.39.00 covers catheters, cannulae and the like, not elsewhere specified or included (n.e.s.o.i.), used in medical, surgical, dental or veterinary sciences, and parts and accessories thereof.

[7] USITC DataWeb/Census, HTS subheading 9018.90.80, accessed July 1, 2021. HTS subheading 9018.90.80 covers instruments and appliances used in medical, surgical, dental or veterinary sciences, n.e.s.o.i., and parts and accessories thereof.

[8] See 85 Fed. Reg. 20195 (April 10, 2020). For more information on exports of COVID-19 related medical goods see USITC, “COVID-19 Related Goods,” December 2020, 21, 46, 60–61.

[9] USITC DataWeb/Census, HTS subheading 9019.20.00, accessed July 1, 2021. HTS subheading 9019.20.00 covers ozone, oxygen and aerosol therapy, artificial respiration or other therapeutic respiration apparatus, and parts and accessories thereof.

[10] USITC, “COVID-19 Related Goods,” December 2020, 61-71. Trump White House Archives, “Memorandum on Order Under the Defense Production Act Regarding the Purchase of Ventilators,” April 2, 2020.

[11] This includes a wide range of specialized equipment sold to manufacturers, technology development companies, independent laboratories, utilities, and governments. IBIS World, “Measuring, Testing and Navigational Equipment Manufacturing in the UK,” December 9, 2020.

[12] USITC DataWeb/Census, HTS subheading 9032.89.60, accessed July 1, 2021. HTS subheading 9032.89.60 covers Automatic regulating or controlling instruments and apparatus, n.e.s.o.i.

[13] USITC DataWeb/Census, HTS subheading 9015.80.80, accessed July 1, 2021. HTS subheading 9015.80.80 covers surveying, hydrographic, oceanographic, hydrological, meteorological or geophysical instruments and appliances, n.e.s.o.i., nonoptical.

[14] IBIS World, “Measuring, Testing & Navigational Equipment Manufacturing in the UK,” December 9, 2020.

[15] USITC DataWeb/Census, HTS 8517.62.00, accessed July 1, 2021. HTS subheading 8517.62.00 covers machines for the reception, conversion and transmission or regeneration of voice, images, or other data, including switching and routing apparatus.

[16] USITC DataWeb/Census, Digest EL002, accessed March 15, 2021. Digest EL002 covers telecommunications equipment; PWC, “Practical Steps for Responding to the Coronavirus Crisis,” accessed on July 1, 2021.

[17] Processing units are used to retrieve and execute instructions to a computer and are primarily manufactured in fabrication plants.

[18] USITC DataWeb/Census, HTS subheading 8471.50.01, accessed July 1, 2021. HTS subheading 8471.50.01 covers processing units other than those of HS subheadings 8471.41 and 8471.49, n.e.s.o.i.

[19] USITC DataWeb/Census, HTS 8471.90.00, accessed July 1, 2021. HTS subheading 8471.90.00 covers magnetic or optical readers, n.e.s.o.i.; machines for transcribing data on data media in coded form and machines for processing such data, n.e.s.o.i.

[20] USITC DataWeb/Census, HTS subheading 8526.10.00, accessed July 1, 2021. HTS subheading 8526.10.00 covers radar apparatus.

[21] The Defense Post, “Qatar Cleared for $3 Billion Purchase,” May 10, 2019. USDOD, “Qatar-AH-64E Apache Helicopters,” May 9, 2019.

[22] USITC DataWeb/Census, HTS subheading 8542.31.00, accessed July 1, 2021. HTS subheading 8542.31.00 covers electronic integrated circuits: processors and controllers. U.S. exports of semiconductor “chips,” are primarily only for certain end-uses, and often are not transferrable between different end-uses. For example, U.S. chip makers derive only a small amount of their revenue from automotive chips (approximately 10 percent) as this product has a unique set of requirements that makes switching production focus onerous. For more information, see Coffin and Kim, “U.S. Firms Are Becoming Leaders,” June 2017; Lawrence and VerWey, “The Automotive Semiconductor Market,” May 2019; Coffin, Oliver, and VerWey, “Building Vehicle Autonomy,” November 2019.

[23] VOA News, “US-China Trade War Seen as Boosting Vietnam Growth,” January 12, 2020.

[24] USITC DataWeb/Census, HTS subheading 8517.12.00, accessed July 1, 2021. HTS 8517.12.00 covers telephones for cellular networks or for other wireless networks.

[25] Tariffs that are expressed as a percentage of a good’s value are called ad valorem tariffs. An ad valorem equivalent converts a tariff rate that was originally expressed in “specific” terms (e.g., a dollar per ton) into a percentage of the appraised custom value of imported good.  

[26] 84 Fed. Reg. 20459, May 9, 2019.

[27] International Data Corporation, “Smartphone Shipments Return to Positive,” January 27, 2021.

[28] USITC DataWeb/Census, HTS subheading 8526.91.00, accessed July 1, 2021. HTS subheading 8526.91.00 covers radio navigational aid apparatus, other than radar.

[29] USITC DataWeb/Census, HTS subheading 8526.10.00, accessed July 1, 2021. HTS subheading 8526.10.00 covers radar apparatus.

[30] For more information, see the Transportation Equipment section of this report.

[31] USITC DataWeb/Census, HTS subheading 8471.30.01, accessed July 1, 2021. HTS subheading 8471.30.01 covers portable automatic data processing machines, not over 10 kg, consisting at least a central processing unit, keyboard, and display.

[32] USITC DataWeb/Census, HTS subheading 8473.30.11, accessed July 1, 2021. HTS subheading 8473.30.11 covers printed circuit assemblies, not incorporating a cathode ray tube, of the machines classified in HTS 8471.

[33] CTA, “Comment on Section 301 Tariffs,” September 17, 2018, 5.

[34] Dell, “Form 10-K”, March 26, 2021, 49; HP, “Form 10-K,” December 10, 2020, 36.

[35] USITC DataWeb/Census, HTS subheading 8523.51.00, accessed July 1, 2021. HTS subheading 8523.51.00 covers semiconductor media, solid state non-volatile storage devices.

[36] Sliwa, “Non-volatile storage (NVS),” June 2018.

[37] Yang and Yamazaki, “Homework Triggers Demand Jump for Chips,” March 23, 2020.

[38] USITC DataWeb/Census, HTS subheading 8541.40.60, accessed July 1, 2021. HTS subheading 8541.40.60 covers diodes for semiconductor devices, other than light-emitting diodes, n.e.s.o.i.

[39] Hartman, “Taiwan’s TSMC”,” May 20, 2020.

[40] Lapedus, “Demand Picks Up for 200mm,” February 20, 2020; Baraniuk, “Why Is There a Chip Shortage?” August 27, 2021.

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