Transportation Equipment

Changes in 2021 from 2020:

• U.S. total exports: Increased by $29.3 billion (12.0 percent) to $272.3 billion
  • U.S. domestic exports: Increased by $25.2 billion (11.7 percent) to $241.5 billion
  • U.S. re-exports: Increased by $4.1 billion (15.2 percent) to $30.8 billion
• U.S. general imports: Increased by $45.0 billion (11.8 percent) to $427.5 billion

The value of U.S. domestic exports of transportation equipment^[1] rose by $25.2 billion (11.7 percent) to $241.5 billion in 2021, after falling by 28.3 percent in 2020 (table TE.1).^[2] The transportation equipment digests that contributed most to the rise in U.S. domestic exports in 2021 were motor vehicles; aircraft, spacecraft, and related equipment; and certain motor-vehicle parts. Increases in transportation equipment exports represent a rebound from lower 2020 levels due to the initial COVID-19 outbreak, increased prices due to lower vehicle production, increased foreign motor vehicle production relying on U.S. parts, and renewed foreign deliveries of aircraft. Canada and Mexico were the largest destinations for U.S. domestic exports by value of transportation equipment in 2021, making up 38.6 percent of overall domestic exports. The largest increases in U.S. domestic exports were to Mexico, Canada, and Brazil. These increases were partially offset by decreases to the United Kingdom, Spain, and Belgium.

The value of U.S. general imports of transportation equipment grew by $45.0 billion (11.8 percent) to $427.5 billion in 2021.^[3] Products within the transportation equipment digests that contributed the most to the increase in imports were automotive-related—certain motor-vehicle parts, motor vehicles, primary cells and batteries and electric storage batteries, and internal combustion piston engines, other than for aircraft. In general, increases in transportation equipment imports were due to rising consumer demand for vehicles and decreased domestic production, as well as increased demand for repair and maintenance parts. These increases were partially offset by decreases in U.S. general imports of aircraft, spacecraft, and related equipment and aircraft engines and gas turbines. These decreases were due to deferred aircraft deliveries and reductions in domestic aircraft production. Mexico, Japan, and Canada were the largest sources of U.S. general imports of transportation equipment in 2021, accounting for a 56.4 percent share. Increases in U.S. imports were driven by increases from Mexico, China, and Japan. These increases were partially offset by decreases from Canada and Singapore.

U.S. Domestic Exports

The value of U.S. domestic exports of transportation equipment increased for all digests except rail locomotive and rolling stock (down $78 million or 3.2 percent) and ignition, starting, lighting and other electric storage batteries (down $46 million or 1.6 percent).^[4] In 2021, increases in the value of exports of transportation equipment were led by motor vehicles (up $10.5 billion); aircraft, spacecraft, and related equipment (up $5.9 billion); and certain motor-vehicle parts (up $2.1 billion), which accounted for 73.0 percent of the net increase.^[5] In general, U.S. exports of transportation equipment experienced a rebound in 2021 from the low export levels of 2020 due to initial work stoppages at the onset of the COVID-19 pandemic. Exports of motor vehicles also increased due to rising vehicle prices in response to semiconductor shortages that reduced vehicle production. Exports of aircraft increased in part following the return to service of the Boeing 737 MAX aircraft, as discussed below.

After the reduction experienced in 2020 due to supply-and-demand conditions related to the initial COVID-19 outbreak, increases in U.S. domestic exports of motor vehicles in 2021 marked a return to export levels similar to those in 2016–19. The average level of U.S. domestic exports of motor vehicles between 2016 and 2019 was $69.1 billion, this dropped to $59.7 billion in 2020, and in 2021 increased to $70.2 billion, reaching a level similar to prior years. Part of the increase in exports is explained by the rise in unit values for motor vehicles between 2020 and 2021. The average unit value for exported motor vehicles increased by almost $4,000, explaining the discrepancy between the 17.6 percent increase in value of exports and the 14.1 percent increase in units exported.^[6] The price increase was caused in part by supply chain disruptions, notably a shortage of imported semiconductors, that decreased vehicle production during a period of rising domestic demand.^[7] Vehicle production in the United States decreased by 367,000 units (down 18.9 percent) to 1.6 million units in 2021.^[8] Foreign and domestic sales of vehicles increased in 2021 despite lower production, leading to vehicle inventories decreasing by 3 million vehicles (59.7 percent) to 2 million vehicles.^[9] The four largest destinations by value of U.S. exports in 2021 also experienced three of the four largest 2020–21 increases: Canada ($27.1 billion, up $4.5 billion), Germany ($7.6 billion, up $873 million), China ($6.6 billion, up $502 million), and Mexico ($3.3 billion, up $1.2 billion); South Korea was the fifth-largest export destination ($3.2 billion, up $658 million).^[10]

U.S. domestic exports of certain motor-vehicle parts followed a similar pattern as motor vehicles, increasing by $2.1 billion (6.9 percent) to $31.6 billion.^[11] Increased foreign production of motor vehicles using parts from the United States led to the rise in U.S. exports. Mexico, the world’s sixth-largest manufacturer of motor vehicles, increased production in 2021 to an estimated 3.4 million vehicles, up from 3.0 million vehicles in 2020, leading to increased importation of parts, including from the United States.^[12] U.S. automotive companies continued to invest in vehicle manufacturing facilities in Mexico, explaining why Mexico was the leading destination for U.S. exports of certain motor-vehicle parts in 2021, accounting for 38.7 percent of total exports, and 75.7 percent of the annual increase.^[13]

U.S. domestic exports of aircraft, spacecraft, and related equipment, the largest transportation equipment digest by value, increased by $5.9 billion (8.4 percent) to $75.4 billion in 2021.^[14] However, 2021 exports were well below the 2016–19, pre-pandemic, average level of $119.6 billion. The 2021 export growth was driven in part by a rise in Boeing aircraft deliveries to foreign customers, mainly deliveries of Boeing 737 MAX aircraft, which increased from 4 deliveries in 2020 to 155 deliveries in 2021.^[15] To fulfill these deliveries, Boeing was able to use more than 450 737 MAX aircraft in inventory following the aircraft’s grounding for nearly two years, which had led to a pause in deliveries until December 2020.^[16] The Boeing 737 MAX returned to flight in early 2021 in the United States, Europe, and several other markets.^[17] Overall, foreign deliveries of Boeing aircraft more than tripled, from 62 aircraft in 2020 to 191 aircraft in 2021. Boeing aircraft specifically increased deliveries to Brazil, Singapore, and Ireland, the three countries which experienced the largest increases in aircraft, spacecraft, and related equipment exports in 2021 (up $1.7 billion, $1.3 billion, and $1.2 billion, respectively).^[18]

U.S. General Imports

The value of U.S. general imports of transportation equipment rose for all digests except aircraft, spacecraft, and related equipment (down $2.7 billion); aircraft engines and gas turbines (down $100 million); and motors and engines, except internal combustion, aircraft, or electric (down $16 million).^[19] In 2021, the largest increases in the value of imports of transportation equipment were for four automobile-related product categories: certain motor-vehicle parts; motor vehicles; primary cells and batteries and electric storage batteries; and internal combustion engines, other than for aircraft. Growth in U.S. general imports of transportation equipment was driven by rising consumer demand for motor vehicles and motor vehicle parts during a period of constrained domestic production. The rise in automotive imports was partially offset by declining imports of aircraft and aircraft engines caused by U.S. airlines deferring aircraft deliveries, a continuance of section 301 tariffs on deliveries of new aircraft from Europe, and a reduction in domestic aircraft production.

The value of U.S. general imports of motor vehicles rose by $7.7 billion (4.4 percent) to $181.2 billion in 2021.^[20] This increase is explained by rising consumer demand for motor vehicles, reflected in an increase in U.S. vehicle sales from 14.9 million vehicles in 2020 to 15.4 million vehicles in 2021.^[21] Despite rising domestic sales of vehicles in 2021, U.S. production of vehicles declined 18.9 percent—in part, explaining the need for increased imports to meet demand.^[22] Low domestic production numbers in 2021 were caused by supply chain shortages, especially a lack of semiconductors, which are key components in motor vehicle subassemblies such as anti-lock brake systems, battery management, and safety systems.^[23] The largest increases in U.S. general imports of motor vehicles in 2021 were from countries with established vehicle manufacturing industries: Mexico (up $5.7 billion or 10.1 percent), Germany (up $2.7 billion or 21.4 percent), and South Korea (up $1.2 billion or 7.3 percent).

U.S. general imports of certain motor-vehicle parts experienced the largest gain by value in 2021 of any transportation equipment digest, rising $16.1 billion (21.2 percent) to $92.2 billion.^[24] Primary cells and batteries and electric storage batteries (including electric vehicle batteries) and internal combustion piston engines, other than for aircraft experienced increases in imports in 2021 of $5.6 billion (53.6 percent) and $5.3 billion (21.0 percent), respectively. Imports increased for a broad variety of motor vehicle parts largely because of a strong performance from the vehicle repair and maintenance industry. The semiconductor shortage reduced U.S. production of vehicles in 2021, resulting in higher vehicle prices and more owners keeping their vehicles and increasingly relying on repair services, thereby driving the increase in imports of vehicle parts.^[25] Mexico (up $5.3 billion) and China (up $2.0 billion) were the largest sources of U.S. general imports of certain motor-vehicle parts in 2021. China was also the largest source of U.S. imports of primary cells and batteries and electric storage batteries, with imports from China increasing $2.8 billion (95.0 percent) to $5.7 billion, contributing nearly half of the increase in total imports for the digest in 2021. China is the leading producer of lithium-ion batteries for use in electric vehicles, which accounted for the largest share (50.4 percent) of imports ($8.1 billion in 2021) within this digest.^[26] The largest sources of U.S. imports of internal combustion piston engines, other than for aircraft, were Japan, with an increase of $1.2 billion (31.5 percent) to $5.0 billion and Mexico, with an increase of $1.2 billion (16.5 percent) to $8.4 billion. These increased imports from Mexico and Japan, two countries with large vehicle engine manufacturing industries, accounted for 45.7 percent of the total increase in imports for the digest.

U.S. general imports of aircraft, spacecraft, and related equipment decreased by $2.7 billion (9.4 percent) to $25.8 billion in 2021.^[27] The decline in 2021 imports was a continuation of the major 2020 reduction (down $7.5 billion) in imports as the COVID-19 pandemic reduced airline demand for aircraft in addition to the continued application of section 301 tariffs on new aircraft from Europe, which were suspended on July 9, 2021.^[28] Domestic airlines continued to defer deliveries of new aircraft in 2021 due to reduced passenger demand, including an agreement between Delta and Airbus to continue to defer the start of deliveries of 100 Airbus A320neo aircraft, originally scheduled in 2020, until 2022.^[29] Production and development concerns delayed the initial deliveries of Boeing’s 777X aircraft, which led to decreased imports from Boeing’s foreign aircraft parts suppliers. For example, Japanese companies, including Kawasaki Heavy Industries and Mitsubishi Heavy Industries, are responsible for 20 percent of the 777X aircraft’s main structural components.^[30] Decreases in imports from Japan (down $1.2 billion or 47.5 percent) were responsible for 44.2 percent of the total decrease in aircraft, spacecraft, and related equipment in 2021, followed by decreases from Canada (down $393 million or 6.5 percent) and Italy (down $364 million or 31.4 percent).

Imports of aircraft engines and gas turbines followed a similar trend as aircraft, experiencing a decline in U.S. general imports of $100 million (down 0.5 percent) to $19.8 billion.^[31] Lower domestic production of aircraft in 2021 was responsible for some of the decrease in imports of aircraft engines in 2021. Boeing decreased production rates for several commercial aircraft programs, including the Boeing’s 787 Dreamliner, which was being produced at “very low rates”, down from five per month.^[32] In particular, imports of aircraft engine parts from Singapore were affected by the reduced aircraft production in the United States. Singapore has a leading aircraft engine parts manufacturing industry that produces aircraft engine casings, engine gears, and fan blades, among other parts.^[33] These parts, including engines for Boeing’s 787 Dreamliner, are used in aircraft manufactured in the United States.^[34] Decreases in imports from Singapore (down $1.1 billion or 64.4 percent) overshadowed the smaller total decline in imports of aircraft engines and gas turbines.

 

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Bibliography—Transportation Equipment

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Singh, Jay. “Delta Will Not Take Its First Airbus A321neo Until 2022.” Simple Flying, February 13, 2021. https://simpleflying.com/delta-first-a321neo-2022/.

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