The United States is the world's largest services market and continued to be the world’s leading exporter and importer of services in 2020, reports the U.S. International Trade Commission (USITC) in its new publication Recent Trends in U.S. Services Trade, 2022 Annual Report (inv. no. 332-345).
The USITC, an independent, nonpartisan, factfinding federal agency, compiles the report annually. Each year's report presents a qualitative and quantitative overview of U.S. trade in services and highlights some of the services sectors and geographic markets that contribute substantially to recent services trade performance.
This year’s report focuses on digital and electronic services and includes sections detailing trends in three specific industry categories: audiovisual services, computer services, and telecommunications services. Each section analyzes global market conditions, emerging trends, and the industry outlook in these categories.
The report describes trade in services via cross-border transactions through 2020 and via affiliate transactions through 2019 (latest available data). Highlights include:
- The services sector represents the largest sector of the U.S. economy, and the United States continued to be the world’s top cross-border exporter and importer of services. In 2020, U.S. exports of private services totaled $684.0 billion, whereas imports totaled $435.6 billion.
- Within the services sector, sales by the foreign affiliates of U.S. firms – the leading channel by which many U.S. services are delivered to foreign markets – totaled $1.8 trillion in 2019 while the value of services purchased from foreign-owned affiliates in the United States totaled $1.2 trillion.
- Digital and electronic services accounted for 16.1 percent of total cross-border services exports and 16.4 percent of imports in 2020. Digital and electronic services represented 23.9 percent of total sales by the foreign affiliates of U.S. firms and 15.9 percent of total purchases from the U.S. affiliates of foreign firms.
- U.S. digital and electronic services industries are highly competitive, and U.S. firms are among the global leaders in technology adoption and in research and development. By facilitating data and information flows, firms in the sector provide critical infrastructure to the U.S. and global economies. The report highlights important or emerging trends in selected industries. In particular:
- audiovisual services - the streaming of film and TV serials by subscription video-on-demand companies like Netflix is displacing traditional sources of entertainment, including movie theaters, pay-TV, and over-the-air broadcasting. In the user-generated content market, platforms like YouTube and TikTok have continually improved the sophisticated algorithms that customize the viewing experience for platform users and have been the single most important factor driving the growth of such platforms in terms of both viewing hours and advertising revenue.
- computer services - the placement of new data centers is evolving to include locations at the “edge” of the network (to be closer to customers), on the seacoast (to be near undersea cable landings), and to locations with cooler climates (to reduce emissions and/or energy use). The COVID-19 pandemic forced millions of people into remote working arrangements, increasing the adoption of cloud software and services. During the pandemic, many people also spent more time at home, resulting in strong demand for video games and other at-home entertainment.
- telecommunications services - country-level mobile services markets are driven by economic development and other policies, which impact a number of factors including the predominant mobile technologies used to offer services and the adoption of smartphones by the general populace. In recent years, U.S. cloud and content providers like Google and Facebook have sharply increased their activities and investments in undersea fiber optic cables that transmit data traffic internationally.
The USITC hosted its 15th annual services roundtable, which was held virtually on October 28, 2021. The discussion, summarized in the report, focused on the evolving concept of worker-centric services trade and the potential climate effects of services sector operations as well as the contribution of services industries toward mitigating adverse climate impacts.
Recent Trends in U.S. Services Trade, 2022 Annual Report (Investigation No. 332-345, USITC publication 5325, May 2022) is available on the USITC's Internet site at https://www.usitc.gov/publications/332/pub5325.pdf. A set of interactive, web-based presentations of underlying data is also available at: https://www.usitc.gov/publications/industry_econ_analysis_332/2022/recent_trends_us_services_trade_2022_annual_report.htm