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Key Economic Trends

  • In 2008, the U.S. trade deficit in chemicals and related products increased as a result of the progressive impact of the global economic slowdown, the depreciation of the U.S. dollar relative to the currencies of a number of trading partners, and volatility of feedstock prices in the United States compared with the prices faced by certain competitors. World economic fundamentals changed significantly during the course of the year, and energy prices declined significantly in the latter part of the year after increasing strongly through July.
  • U.S. exports of chemicals increased by $20.4 billion (12 percent) to $189.8 billion in 2008, largely because of increased foreign sales during the first two-thirds of the year to offset slowing domestic demand. U.S. exports declined substantially toward the end of the year, however, as the downturn escalated and several refineries along the U.S. Gulf Coast shut down temporarily because of two major hurricanes. Following steady monthly increases through August, monthly export shipments declined by 11-16 percent per month through the rest of the year.
  • The largest absolute increase in sector exports was in medicinal chemicals, followed by fertilizers. Related-party transfers, particularly of certain newer, high-value products, and growing world consumption of less-expensive generic pharmaceuticals drove the increase in medicinals. World fertilizer prices increased because of tight supplies, higher input prices (sulfur), and higher energy prices (natural gas).
  • U.S. imports of chemicals and related products increased by $29.2 billion (15 percent) to $223.5 billion, largely driven by efforts to offset the impact of production outages resulting from the hurricanes and by continued import strength in several industry segments, including fertilizers and medicinal chemicals. Canada and Ireland were the leading suppliers of fertilizer and medicinal chemicals, respectively, together accounting for 25 percent of total chemical imports.

Trade Shifts in 2008 from 2007

  • U.S. trade deficit: Increased by $8.8 billion (35 percent) to $33.7 billion
  • U.S. exports: Increased by $20.4 billion (12 percent) to $189.8 billion
  • U.S. imports: Increased by $29.2 billion (15 percent) to $223.5 billion

Selected Product Shifts

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