G7 nations, Detroit, Seattle, San Francisco and oil imports lag U.S. trade recovery

More than a year after the recovery in U.S. trade with the world began, there are laggards among leading Customs districts and with key trade partners, according to WorldCity analysis of the most recent U.S. Census bureau data.

Overall U.S. trade stood at a record $2.1 trillion through July, and though many Customs districts and trade partners are back to the normal trend of running at record levels there are some key exceptions:

• Detroit, Seattle and San Francisco, among the top 10 Customs districts, have yet to top the records set in 2008. No. 3 Detroit’s trade is dominated by its relationship with the nation’s No. 1 trade partner, Canada, which has yet to recover to 2008 levels. No. 8 Seattle’s trade is largely dependent on aerospace giant Boeing as well as aircraft, engine and parts exports, which have been hampered by problems with the airline’s delayed 787 Dreamliner.

• Five of the United States’ top 10 trade partners have yet to recover to record 2008 levels, and all five are so-called G7 nations, the group that, in 1975 were the world’s largest industrialized economies. They are No. 1 Canada, No. 4 Japan, No. 5 Germany, No. 6 United Kingdom and No. 10 France. The only other G7 nation outside of the United States, Italy, ranks No. 15 with the United States and also failed to surpass its 2008 record. Trade with G7 nations accounted for 43 percent of all U.S. trade through July of 2002; it has fallen every year since, settling at 32 percent in 2011.

• Among the nation’s top 10 trade partners No. 2 China, No. 3 Mexico, No. 7 South Korea, No. 8 Brazil and No. 9 Taiwan are all trading at record levels through July.

• Among the top 20, No. 11 Netherlands, No. 12 India, No. 16 Singapore, No. 18 Switzerland, No. 19 Ireland and No. 20 Russia also established new records. Russia is now part of the so-called G-8.

• While exports established a new record through the first seven months of 2011, imports did not. U.S. imports are dominated by oil, accounting for more than 15 percent of the total $1.25 trillion, and the value of those imports remained $28.78 billion below 2008 totals through July.

• Excluding oil, U.S. imports would have been up 20.79 billion. Six of the top 10 imports did set new records: No. 3 refined petroleum, No. 4 computers, No. 5 cell phones and other related equipment, No. 7 motor vehicle parts, No. 8 returned exports and No. 10 electronic integrated circuits, or computer chips.

• Among exports, seven of the top 10 and 15 of the top 20 established new records, according to the July data. The exceptions in the top 10 are No. 2 aircraft, engines and parts; No. 3 motor vehicles; No. 5 electronic integrated circuits, or computer chips; and No. 8 computers.

When looking at the nation’s balance of trade – the percentage of total trade that is an export – it’s clear that U.S. trade is becoming more balanced with many nations over the medium term. Among the nation’s top 20 trade partners, that percentage hit record levels with two nations through July, climbing to 21 cents for every dollar of trade with China and to 52 cents with the United Kingdom. The United States set records with another four through the same period of 2010: South Korea (46 cents), Brazil (59 cents), Italy (33 cents) and Singapore (64 cents). All but four of the remaining top 20 set records in 2009 with two more in 2008. The outliers are No. 19 Ireland and No. 20 Russia, whose trade with the United States was most balanced in 2002

The trade deficit/(surplus) picture is a little less easy to characterize. Among the top 10, the United States is running a record deficit with only one nation through July 2011, China. It is running a record surplus with two, the United Kingdom and Brazil, both surpluses for the third consecutive year. Among the top 20, the United States is also running a record deficit with No. 12 India, No. 19 Ireland and No. 20 Russia. The U.S. deficit of $412.28 billion is the highest since 2008 but only the fifth highest this century.

There is an oddity in the trade data.

For only the second time since 2002, New York City remained the nation’s No. 1-ranked Customs district through the first seven months of 2011, ahead of Los Angeles. The last time New York City held the No. 1 spot this late in the year was 2008, before the U.S. recession was in full swing and before global trade swooned in virtually unprecedented fashion.

Los Angles has been the nation’s No. 1 ranked Customs district on an annual basis every year this century except for 2001, when the Sept. 11 terror attacks on New York City, ironically, caused more damage to the west coast’s trade than New York’s.

Most years Los Angeles trails New York early during on then generally overtakes the East Coast Customs district before mid-year. In 2010, for example, when the U.S. economy appeared stronger, Los Angeles surpassed New York in February. In 2009, Los Angeles passed New York in May. In 2006 and 2007, it also passed New York early in the year.

The Los Angeles Customs district, led by the Port of Los Angeles, the Port of Long Beach and Los Angeles International Airport, is a key economic indicator because of its strength as an importer of a wide range of Asian goods, principally from China. If Americans are buying, imports into Los Angeles are increasing. Through July, those imports were at record levels. New York City imports were, nevertheless, growing more rapidly than those in Los Angeles.