Eric Forden
(202) 205-3235
Eric.Forden@usitc.gov

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Change in 2017 from 2016:

• U.S. total machinery exports: Increased by $7.8 billion (6.1 percent) to $135.9 billion
• U.S. general machinery imports: Increased by $16.9 billion (9.4 percent) to $196.4 billion

U.S. total exports of machinery rose by $7.8 billion (6.1 percent) in 2017 to $135.9 billion, with some of the largest product-group increases driven by higher global investment in semiconductor manufacturing and by strong demand for farm and garden equipment, particularly tractors. The export markets that accounted for the largest increases in exports were South Korea (up $3 billion or 57 percent), Japan (up $1.4 billion, 37 percent), and Canada (up $844 million, 4.1 percent) (table MT.1). 

Table MT.1: Machinery: U.S. exports and general imports, by selected trading partners, 2013–17

Source: Compiled from official statistics of the U.S. Department of Commerce.
Note: Import values are based on customs value; export values are based on free along ship value, U.S. port of export. Calculations based on unrounded data. The countries shown are those with the largest total U.S. trade (U.S. general imports plus U.S. domestic exports) in these products in the current year.

U.S. general imports increased by $16.9 billion (9.4 percent) in 2017 to $196.4 billion, with import growth spread widely across product types: imports increased in 26 of 31 machinery product groups. Overall, import growth reflected growing domestic demand fostered by increases in U.S. consumer spending, business investment, and residential and nonresidential construction. The countries that accounted for the largest increases in U.S. imports were China (up $4.6 billion, 9.5 percent), Germany (up $1.8 billion, 10.5 percent), and Mexico (up $1.5 billion, 5 percent).

U.S. Exports^[1]

U.S. domestic exports of machinery substantially increased in two product groups: semiconductor manufacturing equipment (up $4.7 billion, 28.4 percent) and farm and garden machinery and equipment (up $1.1 billion, 13.2 percent).

South Korea, Taiwan, China, and Japan were responsible for the largest increases in U.S. exports of semiconductor manufacturing equipment in 2017. The increases were driven by new semiconductor manufacturing facilities abroad as well as significant expansions and retooling of existing facilities, particularly in South Korea, China, and Taiwan.^[2] The increase of exports to the East Asia region follows the decade-long trend of increased semiconductor manufacturing activities and strong demand for high-technology intermediate products in the region.^[3] Overall, increased equipment investments by so-called “foundries”^[4] and the establishment of new fabrication facilities have fueled demand for U.S. semiconductor manufacturing equipment in Asia.^[5]

After several years of decline, U.S. domestic exports of farm and garden machinery grew by $1.1 billion (13.2 percent) in 2017, mainly in the tractor (and tractor parts), irrigation equipment, and combine harvester segments. Over the previous four years, record harvests and crop production led to declines in commodity prices and farmer incomes, resulting in a global weakening in demand for farm equipment.^[6] Starting in 2017, however, the farm equipment markets in some countries began to recover, leading to increased U.S. exports of such equipment. For example, retail sales of tractors and combines rose 13 percent in South America in 2017 due to improving economic conditions in Brazil and Argentina. In Western Europe, retail sales of agricultural equipment also increased, with the strongest growth occurring in Germany, Italy, and the United Kingdom. In Canada, the aging of farm equipment fleets has led to some replacement activity, particularly for tractors and combines.^[7]

U.S. Imports

U.S. imports of machinery rose by $16.9 billion (9.4 percent) in 2017, driven by increases in U.S. consumer spending, business investment, and residential housing construction. The largest increase was in U.S. imports of semiconductor manufacturing equipment (up by $3.2 billion, 28.7 percent), miscellaneous machinery (up by $2.1 billion, 17.3 percent), and household appliances (up $1.7 billion, 6.6 percent).

Table MT.2: Machinery: Leading changes in U.S. exports and imports, 2013–17

Source: Compiled from official statistics of the U.S. Department of Commerce.
Note: Import values are based on customs value; export values are based on free along ship value, U.S. port of export. Calculations based on unrounded data.

The increase in U.S. imports of semiconductor manufacturing equipment was driven by growth in investment by some of the major U.S. semiconductor manufacturers. Intel, for example, increased capital spending by an estimated 25 percent in 2017.^[8] Overall, purchases of semiconductor manufacturing equipment by North American manufacturers rose by an estimated 24 percent to $5.6 billion in 2017.^[9] Within the industry, increases in capital spending are being driven by 3D NAND^[10] flash memory markets and investment in advanced processing technologies.^[11]

U.S. imports of household appliances grew by 6.6 percent in 2017, with the largest increases (by value) occurring in the vacuum cleaner, washing machine, refrigerator, and stove categories. Overall, increases in U.S. imports of large appliances stemmed from growth in U.S. disposable income and the recovery of the U.S. housing market over the past few years. During 2013–17, for example, housing starts grew at an annualized rate of 6.8 percent, with the biggest single-year increase occurring in 2013, when housing starts rose by 18.5 percent.^[12] The appreciation of the U.S. dollar during 2013–17 also resulted in higher penetration of household appliance imports.^[13] By contrast, increases in imports of vacuum cleaners, fans, and other small household appliances have resulted from intense price competition from foreign manufacturers located in low-cost countries. Such competition has, in turn, led some U.S. companies to relocate production facilities to low-cost jurisdictions (most notably China).^[14] That situation has likely driven up U.S. imports, as small appliances manufactured in these U.S.-owned facilities are shipped to the United States.