Chemicals and Related Products

Changes in 2021 from 2020:

• U.S. total exports: Increased by $59.9 billion (26.1 percent) to $289.1 billion
  • U.S. domestic exports: Increased by $53.4 billion (25.3 percent) to $264.1 billion
  • U.S. re-exports: Increased by $6.5 billion (35.4 percent) to $25.0 billion
• U.S. general imports: Increased by $54.5 billion (16.6 percent) to $383.6 billion

U.S. domestic exports of chemicals and related products^[1] rebounded to pre-pandemic levels in 2021, increasing by $53.4 billion or 25.3 percent (table CH.1).^[2] The growth was driven both by continuing responses to the pandemic and by increasing demand from worldwide economies recovering from pandemic closures.^[3] Most economic sectors use chemicals including healthcare, housing and construction, textiles and apparel, agriculture, batteries, consumer electronics, and vehicles, to name a few.^[4]

Medicinal chemicals—also referred to as pharmaceuticals in this section—continued to account for the largest share of annual chemical exports (about 30.1 percent by value in 2021) and registered the largest absolute increase in terms of value ($21.4 billion).^[5] This growth was largely attributed to products used in response to the COVID-19 pandemic but also included products for other medical conditions as well. Other digests with large absolute increases included certain organic chemicals and miscellaneous plastic products, both categories consisting of products used in a breadth of downstream sectors that benefitted from the worldwide economic recovery. The digest with the largest gain in terms of percentage increase was primary aromatics, which includes certain chemical building blocks used to manufacture downstream chemicals (up 153.2 percent).

U.S. general imports of chemicals also grew strongly, rising by $54.5 billion (16.6 percent) to $383.6 billion in 2021 (table CH.2).^[6] The increase in value was driven largely by three factors: demand for products and inputs associated with the response to the COVID-19 pandemic; products needed in sectors such as construction, motor vehicles, and other downstream manufacturing as world economies expanded; and a boost in global chemical prices of about 17 percent. Medicinal products continued to account for the largest share of sector imports by value (45.8 percent) and accounted for the second-largest absolute gain, again largely because of the COVID-19 pandemic.^[7] Other chemical digests that had large absolute gains in import value were miscellaneous plastic products and fertilizers. Plastics products were increasingly in demand as economies recovered from pandemic-related slowdowns and activity picked up in the construction and transportation sectors, among others. Meanwhile, high demand, short supply, and higher prices reportedly spurred the increases in value of U.S. fertilizer imports. Polypropylene resins, which had a substantial percentage increase in imports (up 144.4 percent or $805.5 million), are critical inputs for products supporting the COVID-19 pandemic response such as personal protective equipment (PPE).^[8] Rising imports of polypropylene resins not only helped meet the surge in U.S. demand but also supplemented U.S. production shortfalls resulting from severe weather in the United States in 2021.^[9]

U.S. Domestic Exports

As shown in table CH.1, medicinal chemicals not only continued to account for the largest share of the value of annual domestic exports in the chemical and related products sector (30.1 percent) but also represented the largest export increase (up $21.4 billion or 36.8 percent).^[10] Although the pharmaceuticals exported were used for many medical conditions, the increase was largely in pharmaceuticals used in the prevention and treatment of or testing for COVID-19, particularly as new COVID-19 vaccines were developed, approved, and deployed worldwide toward the end of 2020 and into 2021. The largest increases were in exports of vaccines for human medicine, a basket category with many products including COVID-19 vaccines; dosage form medicaments, a basket category that includes products used to treat patients with COVID-19; and certified reference materials, another basket category that includes products used to standardize test results, including results from COVID-19 tests. The top three U.S. markets for medicinal chemical exports (and those with the largest absolute changes in 2021) were Canada, Brazil, and Belgium.^[11] Canada has a large pharmaceutical industry; Belgium is a major manufacturing site for vaccines such as the Pfizer-BioNTech COVID-19 vaccine); and Brazil has a large pharmaceutical market.^[12]

Exports of certain organic chemicals rose by $5.3 billion (30.9 percent) to $22.3 billion in 2021.^[13] The largest gains were in chemicals used as inputs in a wide variety of end products such as antifreeze and brake fluids. The major growth market for organic chemicals was Mexico (up $1.1 billion or 36.0 percent), a significant location for vehicle production.^[14]

Exports of certain miscellaneous plastics products grew by $4.4 billion (18.3 percent) to $28.7 billion.^[15] The plastic products with the largest export increases included those used in the global construction and automotive sectors, both of which experienced strong recoveries in 2021 (e.g., plastic forms, fittings, pipes, caps and closures, and gaskets) as well as those used in the packaging or shipping of goods (e.g., plastic crates and sacks and bags).^[16] The three top U.S. export markets for miscellaneous plastics products (and those with the largest absolute increases in 2021) were Canada, Mexico, and China.^[17] Many of these plastic exports, particularly those exported to Canada and Mexico, were used in sectors that expanded in 2021 (e.g., the auto industry and housing and construction). Although exports to these three markets declined during 2020 because of pandemic-related closures and slowdown, exports rebounded in 2021 to exceed pre-pandemic levels as the economies and downstream manufacturing sectors recovered.

The primary aromatics digest experienced the largest percentage increases in U.S. exports, growing by $217.7 million (153.2 percent) to $359.9 million in 2021.^[18] Chemicals in the digest—benzene, toluene, and xylene—are key inputs into downstream chemicals or can be used as final products in all sectors of the economy.^[19] For example, benzene is a major input in the production of styrene, a chemical used to make a variety of downstream products including latex, plastic packaging, disposable cups and containers, and insulation.^[20] However, U.S. benzene exports increased because less benzene was consumed domestically due to declining U.S. styrene production resulting from temporary industry shutdowns caused by severe U.S. weather in February and August 2021.^[21]

U.S. General Imports

Medicinal chemicals accounted for the largest share of sector imports, by value, and were the second-largest growth sector.^[22] The product segments experiencing the largest growth in import value in medicinal chemicals included products used to prevent, diagnose, or treat COVID-19 infections, including immunological products, diagnostic reagents, end-products containing hormones, and vaccines.^[23] U.S. imports of all vaccines for human use, for example, increased by $917.3 million (or 12.3 percent) to $8.4 billion.^[24] Although many vaccines are imported, three COVID-19 vaccines were granted emergency use authorizations in the United States by the Food and Drug Administration in December 2020 and February 2021. Imports of COVID-19 vaccines, at least initially, supplied the U.S. market as domestic production was brought online, likely accounting for much of the overall increase in vaccine imports in 2021.^[25] The countries that accounted for the largest growth in the value of U.S. imports of medicinal chemicals in 2021 were Switzerland (up $3.2 billion or 17.4 percent), Singapore (up $2.3 billion or 36.6 percent), Germany (up $1.8 billion or 8.5 percent), and China (up $1.4 billion or 34.5 percent).^[26] China is a long-time U.S. supplier of medicinal chemicals, particularly lower-cost generic pharmaceuticals and chemicals that are solely or largely produced in China.^[27] Imports from Ireland, the largest supplier of U.S. imports of pharmaceuticals in recent years, dipped slightly in 2021.^[28] One source stated that a recent increase in the corporate tax rate in Ireland (effective 2023) may have caused companies to reevaluate their operations in Ireland.^[29] Much of the U.S. pharmaceutical imports mentioned above, but particularly from Ireland, was likely related-party trade (or intra-firm transfers) between companies operating in the United States and their overseas facilities.^[30] This is the case for most chemical and pharmaceutical inbound and outbound trade flows, given the multinational nature of the industries. For example, the Pfizer-BioNTech COVID-19 vaccine was imported into the United States from the Pfizer facility in Puurs, Belgium, particularly during U.S. clinical trials and once the vaccine was granted emergency use authorization.^[31]

Imports of miscellaneous plastics products rose by $9.2 billion (21.6 percent) to $51.6 billion.^[32] As with U.S. exports, many of the U.S. imports of these plastics products are used in the auto industry and in housing and construction, sectors that expanded in 2021 as the U.S. economy started recovering to pre-pandemic levels. The products imported included housing and construction items (ranging from tableware to building supplies), as well as packaging items such as cartons and plastic bags.^[33] China, Canada, and Mexico supplied almost 60 percent of U.S. imports and accounted for the largest increases in value. China was the largest supplier, and U.S. imports from that country increased by $2.7 billion (or by 16.1 percent) to $19.4 billion. The next two largest suppliers were Canada (increasing by $1.5 billion or 23.3 percent to $7.7 billion) and Mexico (increasing by $1.2 billion or 28.8 percent to $5.6 billion).^[34] Canada and Mexico both have strong plastics industries.^[35] Canada is also considered a major supplier of chemicals overall and has reportedly been the recipient of significant chemical industry investment during the past 10 years, in part because of lower production costs related to the availability of lower-cost shale gas.^[36]

Fertilizers also nearly doubled in value during 2021, increasing by $5.1 billion (or by 80.4 percent) to $11.6 billion, amid supply constraints and shipping issues that sharply drove up prices.^[37] Almost all U.S. imports of fertilizers increased in value but the two largest increases were for urea (up by $1.3 billion or 119.7 percent) and potassium chloride (up by $1.3 billion or 51.9 percent).^[38] Urea prices increased worldwide in 2021 because of high natural gas prices (which slowed worldwide production of ammonia, a key urea input) and world shortfalls of urea as major producers such as China and Russia restricted exports.^[39] Severe U.S. weather in 2021 also temporarily curtailed U.S. production of ammonia, urea, and potassium chloride, resulting in higher prices amid rising demand.^[40] U.S. fertilizer imports from Canada increased by $1.4 billion (46.6 percent) to $4.5 billion as Canada remained a source of nitrogen fertilizers like urea.^[41]

In terms of percentage increases, the top import digest was polypropylene resins in primary forms, which increased by 144.4 percent ($805.5 million).^[42] Polypropylene is a key input into manufacturing a wide variety of goods used in the response to the pandemic, including PPE. The polypropylene imports also supplemented U.S. production shortfalls resulting from severe weather in the United States in February and August 2021, as noted earlier, which caused temporary shutdowns of many facilities producing chemicals.^[43]

 

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