global trade data q1 and q2 tfg usa

2020 Global Trade Data Reveals Insights About Future of Manufacturing Sector

From a recently published article we wrote for Thomas Insights:

Imports fluctuate. The manufacturing industry is well aware of this fact. However, 2020 has taken everyone by surprise. Imports into the United States have had to deal with a lot, from pandemics to uncertain government elections. These trends are important to understand as companies need to plan for 2021 and beyond.

Our team at Federal Group USA compiled and analyzed import data from 2020 and 2019, which was obtained from the U.S. Customs database records of inbound ocean cargo. (Note: The Federal Group USA does not take any responsibility for the accuracy of the data from the U.S. Customs database.) We found some unexpected and interesting trends that will take even the most experienced importer by surprise. Our team distilled the data and broke it down into a series of charts that highlight just how volatile of a year 2020 has been.

2019 to 2020 Import Trends

There have been a number of interesting developments in the past year that have led to fluctuations in imports. Here are a few charts that show the vast differences between 2019 and 2020 imports:

TFG USA Global Trade Data Charts Figure 1

We can see based on figure 1 that imports were level for most countries, except for China. Imports from China decreased by more than 23% year-over-year for Q1 2020. That is a large decrease in just 12 months.

TFG USA Global Trade Data Charts Figure 2

Figure 2 shows that China imports jumped dramatically from Q2 2019 to Q2 2020. Chinese imports jumped more than 30%, which is a staggering amount. Additionally, imports from India were roughly cut in half.

Manufacturing Methods

TFG USA Global Trade Data Charts Figure 3

 

TFG USA Global Trade Data Charts Figure 4

Imports from certain manufacturing methods have dropped through the first two quarters of 2020. Figures 3 and 4 show that these imports have remained relatively stable through the first two quarters, even though they are lower than in 2019. In particular, casting and forging have been hit the hardest in 2020.

Material Imports

TFG USA Global Trade Data Charts Figure 5

TFG USA Global Trade Data Charts Figure 6

Steel has been hit the hardest in 2020 for these material imports. Figures 5 and 6 show that steel imports have remained lower, but relatively stable for the first two quarters of 2020.

Product Type Changes

TFG USA Global Trade Data Charts Figure 7The difference between 2019 and 2020 in figure 7 shows that there was little change between the years.

TFG USA Global Trade Data Charts Figure 8

Figure 8 may be the most compelling chart shown here. The drastic changes in toy, automotive, mask, and medical imports is simply astounding.

Now that we have seen the import differences between 2019 and 2020, it is imperative that we dive into the why behind the differences.

Why Are Imports Drastically Changing?

There are a number of factors at play that have dramatically changed the import landscape in the United States. In our lifetime, we will likely never see such a drastic change in imports from year-over-year again. The overall trends continue to point to imports increasing, but there were some exceptions in the first half of 2020.

COVID-19

Unsurprisingly, COVID-19 may have had the biggest impact on imports from 2019 to 2020. Imports changed widely as the world dealt with its first widespread pandemic in more than 100 years. The effects of the pandemic on imports may be felt for years to come.

Medical Needs

The need for PPE (Personal Protective Equipment) and medications drove much of the increased China imports seen in the second quarter of 2020. China is dominant when it comes to the medical supplies market. The country manufactures more medical supplies than the rest of the world combined, according to the The New York Times.

This dominance led to an incredible increase in masks and medical supplies imports from China. The United States needed these products, and China had a strong hold of the production. Medical imports will likely hold steady in Q3 2020 as COVID-19 still persists.

Less Driving

There have been many unexpected impacts on imports from the economy shutting down and stay-at-home orders. With more people being forced to stay home, there were fewer people on the road. The result was a dramatic drop in automotive-related imports. Everything from tires to axles had less demand.

Look for automotive imports to rise dramatically in the third quarter of 2020 as the economy has reopened, people have gone back to work and school, and there was more domestic traveling. We’ve already seen there was an increase of 19% in the number of U.S. travelers this year as U.S. citizens are barred from entering many countries around the world. This means more domestic travel via road tips, which should translate into increased Q3 2020 automotive imports.

Keeping Children Engaged and Entertained

Frustrated parents dealing with bored children at home had an impact on toy imports. With traditional children’s entertainment, such as movie theaters, shut down, parents were looking for anything they could use to keep their children entertained through the long days stuck at home. The result was toy imports more than doubling in just a year. It remains to be seen what will happen to toy imports in the third quarter of 2020.

Forging, Casting, and Stamping Goods Imports Down Overall

COVID-19 had a broad impact on imports on goods made from casting, forging, and stamping.

China had to shut down many factories in the first quarter of 2020, which resulted in the drop in imports. In the second quarter of 2020, orders from United States customers were delayed or canceled as the U.S. economy shuttered. COVID-19 decreased goods manufactured from these methods for the first half of 2020. Third quarter 2020 import data may show a substantial increase in imported products manufactured using these methods.

Trade War and Tariffs

China tariffs were designed to cut down on China imports, the imports will continue to increase. Tariffs are only so effective on imports. For most goods, it is still cheaper to import them from another country rather than manufacture them in the United States.

New Administration

The presidential election could have a broad impact on imports going forward. A new administration would likely mean a return to more open free trade between the United States and foreign countries. Looking outward, this could mean stronger partnerships with our allies, which would likely include an increase in imports. We will continue to update the quarterly data from the U.S. customs database to gauge import levels in the United States.

Take Advantage of Imports

Outsourcing manufacturing to other countries will continue to be an important solution for companies that need to stay competitive. Free trade and imports will allow companies to take advantage of lower manufacturing costs while still maintaining quality. Therefore, it is important that businesses partner with knowledgeable supply chain companies with years of experience and a history of delivering real results.

Reach out to The Federal Group USA today to learn more about how incorporating imports into your business can be beneficial. Our team will create a custom manufacturing solution that will deliver real results.

In addition, we would like to continue writing articles that are important to you. If there are any specific topics that you’d like us to research, please contact us and let us know. We are also available to create personalized reports  on specific commodities, countries, shippers, buyers for either individuals or companies upon request.