California’s merchandise export trade was nominally valued at $15.906 billion in September, a solid 6.4% gain over the $14.953 billion recorded in the same month one year earlier, according to a Beacon Economics’ analysis of official trade statistics released this morning by the U.S. Census Bureau’s Foreign Trade Division.

Over the same period, U.S. exports essentially stagnated, edging up just 0.1% to $171.437 billion from $171.249 billion. As a result, California’s share of the nation’s merchandise export trade shot up to 9.3% from 8.7% one year ago.

Exports of California’s manufactured goods rose by 6.0% year-over-year to $10.101 billion from $9.533 billion. Meanwhile, the state’s exports of non-manufactured commodities increased 4.5% to $1.806 billion from $1.729 billion. Re-exports hopped by 8.3% to $3.999 billion from $3.692 billion in September 2023.

California’s exports in the first three quarters of 2024 amounted to $136.132 billion, a slender 2.1% gain over the $133.284 billion in goods the state’s industries shipped abroad during the same period in 2023.

“September’s bump in California’s merchandise exports was all the more remarkable in contrast to the lackluster growth in overall U.S. exports and an actual 3.6% fall-off in exports from Texas,” said Jock O’Connell, Beacon Economics’ International Trade Advisor.

California Imports Rise

The U.S. Commerce Department reports that California was the nation’s leading state-of-destination for U.S. imports. The state’s 15.5% share of all U.S. merchandise imports in September was valued at $44.255 billion, a 9.8% increase over the $40.304 billion in imported goods in September 2023.

• Manufactured imports this September leapt by 11.2% to $39.881 billion from $35.867 billion one year earlier.
• Non-manufactured imports were valued at $4.374 billion, off by 1.4% from the $4.437 billion in non-manufactured imports the state absorbed in September 2023. 

Please note that Beacon Economics has long taken a skeptical view of the federal government’s state-of-destination statistics. The data’s fundamental shortcoming is that they capture not just goods consumed by California residents or used by California businesses but also a sizable quantity of imported merchandise that is offloaded at California ports but is bound for markets elsewhere in the country.

A CLOSER LOOK AT THE NUMBERS

As always, Beacon Economics advises against reading too much into month-to-month fluctuations in state export statistics, especially when focusing on specific commodities or destinations. Significant variations can occur due to unusual developments or exceptional one-off trades and may not be indicative of underlying trends. For that reason, Beacon Economics compares the latest three months for which data are available (i.e., July-September) with the corresponding period one year earlier. Please note that the numbers cited in this report are nominal values.

LEADING EXPORT COMMODITIES

The table below shows annual changes in California’s merchandise exports. In recent years, eleven commodity groups have posted three-month export totals exceeding $1 billion. Of those, all but two recorded nominal year-over-year gains in the latest quarter.

DESTINATIONS

Fourteen overseas markets recorded one billion dollars or more in imports from California in the last three months:

In this year’s third quarter, the state’s overall export trade with the economies of East Asia gained by 9.4% to reach $16.057 billion from $14.675 billion. That increase occurred despite sharp declines in shipments to China and Hong Kong.

Meanwhile, California’s exports to the European Union strengthened by 10.2% to $8.816 billion from exactly $8.000 billion one year earlier. The state’s exports to Latin America and the Caribbean (excluding Mexico) jumped by 18.6% to $ 2.547 billion from $2.148 billion. But California’s shipments to the nations of Sub-Saharan Africa plunged 27.5% to $161 million from $223 million.

Mexico and Canada, America’s partners in the North American Free Trade Area, together accounted for 29.0% of California’s $47.073 billion merchandise export trade in the third quarter of the year as the nominal value of shipments to our immediate neighbors edged up by 1.2% to $13.636 billion from $13.474 billion. 

MODE OF TRANSPORT

In the latest quarter, 49.1% of the state’s $47.073 billion merchandise export trade was shipped by air, while waterborne transport carried 24.4% of the outbound trade. The balance of the state’s exports largely travelled overland to Canada and Mexico. 

THE PORTS

Trade through California ports has grown over the last five years, however, the mode by which goods are moved has shifted. Airports and seaports continue to be the primary way by which goods are exported from California ports, but exports have declined at seaports (-6.1%) over the last five years. In contrast, exports from land ports have grown a substantial 43.6% over the same period.

Imports through California ports are up 32.4% over the last five years. Seaports continue to account for a majority of the state’s import activity although imports have only grown 25.6% at seaports in the last five years. Imports through California’s airports (61.4%) and land ports (31.6%) have grown at a quicker pace during this time.

From July 2024 to September 2024, total export trade at California ports was up 12.6% over the same period last year. Exports were up through seaports (4.9%), land ports (7.4%), and airports (21.7%) over this period.

Total import trade at California ports was up 18.1% over the same period last year. Imports rose at airports (39.2%) and seaports (15.1%), but remained largely unchanged at land ports (0.1%).

• California ports accounted for 11.1% of U.S. exports from July 2024 to September 2024, up 0.9 percentage points over the same period one year ago.
• California ports accounted for 20.5% of U.S. imports from July 2024 to September 2024, up 1.3 percentage points over the same period one year ago.
• Container counts at the Port of Long Beach grew 20.1% from September 2023 to September 2024.
• Container counts at the Port of Los Angeles grew 22.5% from September 2023 to September 2024.

THE OUTLOOK

By some time tonight, we may have a clearer idea of just how chaotic the future of America’s trade relations with the rest of the world will be. The Democratic candidate, Vice President Kamala Harris, has given little indication that she would deviate appreciably from the trade policies of the current administration, some aspects of which – notably in the area of tariffs –were inherited from the previous administration of her Republican opponent, former President Donald Trump. Should the balloting favor Mr. Trump, it is almost certain that he will implement the America First foreign policy he has espoused during his campaign, a policy which will most likely feature a much more aggressive use of tariffs to right the trade imbalances he abhors.

We may also have a more definitive sense of how far a Trump administration will go to unravel the billions of dollars the Biden administration has very lately been doling out to seaports in California (and elsewhere) to bolster their zero-emission programs as well as the additional billions invested by the current administration on offshore wind projects that will create more business for ports around the country. If nothing else has been made obvious, Donald Trump is not alarmed by climate change and certainly does not like windmills. Those projects, which would improve the financial status of California’s major ports and enhance their competitive position, could be jeopardized.

Otherwise, it’s still mostly all about climate change. In the United States, Hurricanes Helene and Milton were reminders of how virulent storms can be and how regions as distant from the sea as North Carolina can suffer from what had long been considered coastal hazards. Devastating typhoons have been afflicting East Asia, while heavy rains and flooding have lately beset much of Europe, most recently in Spain. Legitimate concerns are being raised about how extreme future storms could severely disrupt the supply chains that link manufacturers to markets.