Calm before the trade storm? State exports surge in February

Date: Monday, April 9, 2018
Source: The Sacramento Bee

California’s merchandise export trade continued its strong start to 2018 in February, with Golden State businesses shipping merchandise valued at $14.62 billion to foreign nations.

That was up nearly 9 percent from $13.46 billion in February 2017, according to Los Angeles-based Beacon Economics’ analysis of U.S. trade statistics released by the U.S. Census Bureau.

In January, California firms shipped merchandise valued at $13.7 billion, up 3.2 percent from $13.27 billion at the start of 2017.

State exports of manufactured goods in February rose 4.4 percent to $9.3 billion year-over-year, and exports of non-manufactured goods – chiefly agricultural products and raw materials – surged 28 percent to slightly more than $2 billion. Re-exports increased by 10.7 percent, to $3.3 billion from $2.98 billion last year.

“At least for now, economic fundamentals – a weak dollar and robust overseas demand for a wide range of California products – continue to drive our exports higher," said Jock O’Connell, Beacon’s international trade adviser.

O’Connell noted that shipments of almonds – the state’s No. 1 ag export – were up more than 35 percent in February. Since April 2, almond shipments to China faced an additional 15 percent tariff imposed by Beijing in retaliation for heightened U.S. import duties on Chinese steel and aluminum. Consequently, Beacon officials said spring export numbers for various California-grown crops and other products will bear watching.

Beacon’s analysis noted: “For now, we expect a surge in the March export numbers as exporters deliver shipments of California goods to China before Chinese customs collectors ratchet up levies. In the bigger picture, continued strength in the U.S. economy should buoy imports while weakness in the dollar and growth among our trading partners will continue to fuel exports.”

At the dawn of 2018, China edged ahead of Canada as California’s second-largest export market – $4.17 billion in shipments in the December-February period. Mexico is easily the No. 1 destination for California goods, taking in $7.01 billion in the same three-month period.

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