New Study: High Tech Trade Down

U.S. high-tech goods exports fell 26 percent from $223 billion in 2000 to $166 billion in 2002, according to a study released by AeA. It shows that U.S. electronics imports were down by 19 percent during the same time period, and that the technology goods deficit in 2002 was a record $54 billion. The value of the high-tech goods exports and imports reached historic highs in 2000.

Despite the overall downturn, Tech Trade Update 2003 found some trading partners with which high-tech trade is growing. U.S. imports from China increased by $8.4 billion, or 32 percent between 2000 and 2002. In fact, China became the United States’ number one supplier of high-tech goods, jumping ahead of Japan and Mexico, in 2002.

"These data echo the findings of our Tech Employment Update report released earlier this year which found a 10 percent drop in US tech employment from 2000 to 2002" said William T. Archey, President of AeA. "Clearly, the worldwide economic downturn is taking a toll on the technology industry."

The findings show that international trade of high-tech services is playing an increasingly important role. The trade surplus in these services more than offsets the deficit of tech merchandise trade. Most U.S. tech services are sold abroad through affiliates; they totaled $95 billion in 2000 (the latest data available), compared to $37 billion sold in the United States through foreign subsidiaries, resulting in a $58 billion surplus.

Some U.S. tech services were also sold from U.S.-based operations into other countries. Total cross-border tech services exports reached $17 billion in 2001 (the latest data available). This compares to U.S. cross-border tech imports of $7 billion in 2001, resulting in a $10 billion surplus.

Tech Trade Update 2003 examines U.S. high-tech trade between 2000 and 2002 and is based on the most current U.S. government data. AeA members can purchase the report for $10; non-members for $20. Visit www.aeanet.org to download the report, or call 800-284-4232 or 408-987-4200.

Key Findings:

- Technology goods exports fell 26% from $223 billion in 2000 to $166 billion in 2002.

- High-tech goods imports decreased 19%, from $271 billion in 2000 to $220 billion in 2002.

- The deficit in technology goods trade was a record $54 billion in 2002.

- U.S. tech services sold abroad through subsidiaries totaled $95 billion in 2000, while foreign subsidiaries sold $37 billion in tech services to U.S. customers.

- This surplus of tech services sold through subsidiaries totaled $58 billion, more than any technology goods deficit recorded.

- U.S. tech services sold abroad by U.S.-based companies as cross-border exports totaled $17 billion in 2001. This compares to U.S. cross-border tech imports of $7 billion, resulting in a $10 billion surplus.

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