The US Economy Overview
The United States, boasting the most formidable economy globally and ranking as the third most populous state, unearths itself beneath the scrutiny of global economists. According to the April 2024 projections from the IMF's World Economic Outlook, the U.S. financial system is predicted to swell by 2.7% in 2024, so it is best to slow down to an extra modest 1.9% in 2025.
This monetary trajectory follows a period of competitive interest rate hikes by the Federal Reserve during 2022 and 2023, peaking at %5. Yet, the resilient labor marketplace and giant public costs pushed through the Bipartisan Infrastructure Deal have humbled the economic engines. As inflation develops downward closer to the coveted 2% benchmark and economic momentum wanes, it's broadly expected that the Fed will initiate hobby charge cuts by mid-2024.
In its pursuit of bolstering economic alliances, the U.S. has sought to improve cooperation with more than one trading companion. Initiatives such as the Indo-Pacific Economic Framework (IPEF) and the Americas Partnership For Economic Prosperity (APEP) stand out. Furthermore, the Inflation Reduction Act incentivizes electric-powered cars via imparting tax credits, supplying a specific percentage of the vital minerals within the batteries that originate from the U.S. Or a country with which the U.S. Has a loose trade agreement.
The U.S. 2025 Supply Chain Strategies
Looking ahead to 2025, the U.S. will continue to see increased imports in technology-driven industries, especially Electrical machinery and Pharmaceuticals. The ongoing digital revolution, with an aging population and constant demand for new healthcare products, is likely to drive growth in these categories.
In addition, the Green energy and Sustainable products industries could see an increase as the U.S. continues the transition to a low-carbon economy. Things like Electric vehicles (E.V.s) and related products could also be on the rise, reflecting the global push for cleaner transport solutions.
Reshoring & Nearshoring is an important supply chain strategy of the U.S. to reshape the offshore production and import of goods and services. There is a subheading on this subject in the rest of the article.
List of Products Imported by The US
source: ITC Trademap 2024The U.S. Import Statistics
The table above shows the 20 products that the U.S. imports the most, with their H.S. Codes and total import values in 2023. Among the leading categories is electrical machinery and equipment, which increased from approximately $319 billion in 2014 to over $463 billion in 2023. The U.S. aims to diversify the supply network of electronic products, especially those supplied from China, for technology and electronic devices. In order to create a supply chain covering the U.S., Mexico, and Canada, brands need to shift their production facilities to the main continent.
Boilers, machinery, and mechanical appliances also show a significant presence, with imports rising from around $331 billion in 2014 to nearly $459 billion in 2023. This underscores the importance of industrial and mechanical equipment to the U.S. economy.
Another striking category is transportation vehicles, which imported $381 billion in 2023. Drug imports have almost tripled, from $73 billion in 2014 to $178 billion in 2023. The U.S. has begun implementing various incentive programs to attract domestic companies, particularly those in the pharmaceutical industry, to re-introduce production to the U.S.
List of Countries Imported by The US
source: ITC Trademap 2024The U.S. Reshoring and Nearshoring Strategies
As seen in the table above, China has lost its status as the country that exports the most to the U.S. after many years. The main reason for this is the new supply chain strategies followed by the U.S.
U.S. Reshored and Nearshored Strategies The U.S.'s Reshored and Nearshored methods are to reduce cooling, especially for imported products originating from China and India. In order to make the supply chain more functional, the U.S. wants all stages of production to be stored within itself or to take place in its border neighbors. These strategies aim to protect against geopolitical risks such as the pandemic and the Ukraine-Russia conflicts, which highlight the weaknesses of global supply chains.
What Is Methods of Reshoring
Reshoring requires a U.S. trigger. Companies have goods returned to the U.S. The U.S. The authorities have introduced several pieces of legislation to guide this process, including the Inflation Reduction Act (IRA), which adds tax incentives and subsidies to stimulate domestic manufacturing in critical sectors such as semiconductors, electric vehicles (E.V.s), and prescription drugs. Consequently, relocation efforts have accelerated, driving construction spending in the U.S. to $1.5 billion. The production areas. Overall, it has risen, reaching an annual $195 billion by 2023, up nearly 80% from the previous year.
What Is Near Roads-Shoring ( Nearshoring )
Then again, nearshoring focuses on shipping production to the U.S., typically to Mexico and Canada. This approach offers many perks, as well as lower transportation costs, shorter delivery times, and the ability to respond quickly to market changes. Mexico, in particular, has developed proximity to the U.S., favorable trade agreements, and a professional workforce.
The U.S. Trade Agreements
- US - Israel FTA
- US - Japan FTA
- US - Australia FTA
- US - Bahrain FTA
- US - Chile FTA
- US - Colombia Trade Promotion Agreement (TPA)
- US - Jordan FTA
- US - Mexico - Canada Agreement (USMCA)
- US - Morocco FTA
- US - Panama Trade Promotion Agreement (TPA)
- US - Peru TPA
- US - Oman FTA
- US - Singapore FTA
- US - South Korea FTA (KORUS)
- US - Dominican Republic - Central America FTA
U.S. Trade Policies
1. Import licenses are generally unnecessary for maximum products entering the U.S. However, positive goods may concern import quotas, both absolute or tariff-price. The modern updates can be obtained from U.S. Customs and Border Protection (CBP).
2. Goods imported into the U.S. should generally bear an everlasting, legible, and conspicuous mark indicating the country of beginning in English. Specific objects like food, cosmetics, textiles, garb, family merchandise, and flammable fabric require extra labeling.
3. Import obligations inside the U.S. Generally are available in 3 paperwork: ad valorem, particular, or compound. Standard charges follow imports from international locations that have secured permanent ordinary trade members of the family (NTR) or Most Favoured Nation (MFN) status, along with Hong Kong and mainland China. In 2023, the easy average implemented MFN responsibility turned into three.Three%.
4. The U.S. Continues a stringent stance on anti-dumping (A.D.) laws. When the Department of Commerce (DOC) suspects that an overseas product is being bought at less than its truthful value, it can provoke an anti-dumping obligation investigation. The U.S. International Trade Commission (USITC) is tasked with accomplishing the final damage investigation. Should it confirm the dumping, the DOC will issue an obligation order.
5. The U.S. Also enforces countervailing (CV) legal guidelines. If the DOC determines that an overseas product benefits from unfair government subsidies, it can release an investigation. Upon confirmation, a countervailing responsibility order is issued in opposition to the implicated imports.
6. On April 26, 2023, the U.S. Trade Representative (USTR) released its annual Special 301 Report, which assesses the highbrow belongings rights (IPR) protection regulations and enforcement measures of over a hundred trading companions. The file located 9 nations—Argentina, Chile, mainland China, India, Indonesia, Russia, Saudi Arabia, Ukraine, and Venezuela—on the Priority Watch List.
7. Various choice packages provide a duty-loose reputation to imports, which includes the U.S. Generalized Scheme of Preferences (GSP), the African Growth and Opportunity Act (AGOA), and the Caribbean Basin Initiative (CBI). Additionally, an array of unfastened alternate agreements (FTAs) stays in effect. Detailed records are available from the Office of the USA Trade Representative (USTR).
Written by: Aykut Alan
References
1. The United States: Market Profile
https://research.hktdc.com/
2. African Growth and Opportunity Act (AGOA)
https://www.state.gov/african-growth-and-opportunity-act-agoa/
3. Countries & Regions
https://ustr.gov/countries-regions
4. Advancing U.S. Nearshoring Priorities
https://features.csis.org/US-nearshoring-in-central-america-with-SEZs/
5. New Tariff Policy Amplifies the United States' Efforts To Bolster
https://www.swlaw.com/publication/new-tariff-policy-amplifies-the-united-states-efforts-to-bolster-nearshoring-strategy
6. Nearshoring Strategy
https://www.swlaw.com/publication/new-tariff-policy-amplifies-the-united-states-efforts-to-bolster-nearshoring
7. Top Imported Products of the USA and Their Trade Policies
www.ihracat.co
COMMENTS