California’s merchandise export trade was nominally valued at $16.484 billion in October, a solid 5.3% gain over the $15.654 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 actually slipped by 0.7% to $176.876 billion from $178.084 billion. As a result, California’s share of the nation’s merchandise export trade shot up to 9.3% from 8.8% one year ago. Equally remarkable was that exports from Texas fell 6.9% year-over-year while overseas shipments from Florida declined by 4.2%.

Exports of California’s manufactured goods dipped by 1.1% to $9.488 billion from $9.595 billion last October. Meanwhile, the state’s exports of non-manufactured commodities rose by 8.9% to $2.275 billion from $2.090 billion. Re-exports jumped by 18.9% to $4.720 billion from $3.969 billion in October 2023.

California’s exports in the first ten months of 2024 amounted to $152.616 billion, a 2.5% gain over the $148.938 billion in goods the state’s industries shipped abroad during the same period in 2023.

“October’s 5.3% bump in California’s merchandise exports was all the more gratifying given the fall-off in exports nationally and in certain rival states which lose no opportunity to mock California,” said Jock O’Connell, Beacon Economics’ International Trade Advisor.

California Imports Continue To Lead Nation

The U.S. Commerce Department reports that California was once again the nation’s leading state-of-destination for U.S. imports. The state’s 15.6% share of all U.S. merchandise imports in October was valued at $45.054 billion, a 7.5% increase over the $41.903 billion in imported goods in October 2023.

• Manufactured imports this October leapt by 8.8% to $40.415 billion from $37.143 billion one year earlier.
• Non-manufactured imports were valued at $4.640 billion, off by 2.5% from the $4.760 billion in non-manufactured imported into the state in October 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., August-October) 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:

Through October, the state’s overall export trade with the economies of East Asia gained by 7.5% to reach $16.094 billion from $14.976 billion. That increase occurred despite sharp declines in shipments to China and Hong Kong as surging shipments to Malaysia helped counter the decline.

Meanwhile, California’s exports to the European Union strengthened by 14.1% to $9.407 billion from $8.243 billion one year earlier. The state’s exports to Latin America and the Caribbean (excluding Mexico) jumped by 15.7% to $2.584 billion from $2.233 billion. But California’s negligible export trade with the nations of Sub-Saharan Africa edged up to $185 million from $169 million. Exports to Israel, California’s 32nd largest export market, rose 17.8% to $357 million from $303 million.

Mexico and Canada, America’s partners in the North American Free Trade Area, together accounted for 28.4% of California’s $47.073 billion merchandise export trade in the year’s first ten months as the nominal value of shipments to our immediate neighbors edged down by 3.4% to $13.651 billion from $14.125 billion.  

MODE OF TRANSPORT

In the last three months, 50.6% of the state’s $47.073 billion merchandise export trade was shipped by air, while waterborne transport carried 25.3% 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 remained stable over the last five years, however the mode by which goods are moved has shifted. Airports and Seaports continue to be the primary method for exporting goods from the state, although exports have declined at Seaports (-5.5%) over the last five years. In contrast, exports at Land Ports have grown a substantial 45%.

Imports through California ports are up 36.2% over the last five years. Seaports continue to account for the majority of imports through California, however these imports have only grow 32.1% over the last five years. Imports through California Airports (55.7%) have grown at a quicker pace over the last five years.

• From Aug-24 to Oct-24, total export trade at California ports was up 11.6% over the same period last year. Exports were up through Seaports (5.4%), Land Ports (6.0%), and Airports (19.3%) over this period.
• Total import trade at California ports was up 16.4% over the same period last year. Imports were up through Airports (30.4%), Seaports (14.6%), and Land Ports (2.4%) over this period.
• California ports accounted for 11.3% of all U.S. exports from Aug-24 to Oct-24, up 1.1 percentage points over the same period one year ago.
• California ports accounted for 21.4% of all U.S. imports from Aug-24 to Oct-24, up 1.1 percentage points over the same period one year ago.
• Container counts at the Port of Long Beach grew 18.5% from October 2023 to October 2024.
• Container counts at the Port of Los Angeles grew 21.2% from October 2023 to October 2024.

THE OUTLOOK

Editorial writers and economic affairs pundits in both the United States and abroad have lately achieved a rare degree of unanimity in warning that the new tariffs President-Elect Donald Trump has promised to impose on nearly all U.S. imports from almost every source will be harmful both to international trade and to America’s own economic interests.

To be sure, some U.S. industries will welcome higher duties on the imported goods with which they compete. Domestic steel manufacturers, for example, are likely to be ecstatic that higher tariffs on imported steel will enable them to charge higher prices for the steel used to rebuild the nation’s decaying infrastructure and construct desperately needed housing. The country’s remaining 82,000 steel workers will presumably rejoice.

For the nation’s exporters, new or higher U.S. tariffs will be invitations to retaliation by foreign governments seeking to protect their own industries. America’s farmers can expect to see barriers raised to shipments of their produce. In addition to charging higher duties on shipments of U.S. farm products, non-tariff measures have also been employed to discourage imports of goods from America. Farmers, though, are a politically favored constituency. In the last Trump administration, whatever losses sustained by denied export sales were more than compensated by support payments funneled through a variety of U.S. Department of Agriculture programs. Smaller exporters have generally been expected to be more resourceful in surviving the loss of potentially vital overseas markets.

In the past, foreign officials have aimed their retaliatory measures at industries or constituencies that are acutely sensitive to those in power in Washington, D.C. Harley-Davidson motorcycles and bourbon were singled out in the past because they are manufactured in congressional districts that were represented by politicians thought to have influence over trade policy.

That practice raises the question of how vulnerable California exporters may be to retaliatory measures. California has a host of industries that may be subject to new import restrictions. But, as a ‘Blue State’ notorious for its antipathy to the President-Elect, California is likely to have minimal leverage in lobbying for policy changes. That stark reality, however, could work to the benefit of the state’s exporters because targeting California exports is not apt to have the same political resonance among powerbrokers as targeting, say, lobsters from GOP Senator Susan Collins’ Maine.

Stay tuned. By next month, we should have a clearer idea of how tumultuous 2025 will be for members of California’s foreign trade community.