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An Introduction to U.S. Trade Databases

posted by Jennifer Diaz September 25, 2020 1 Comment

Co-Authored by Sharath Patil

Introduction

There are many factors that U.S. exporters and importers should be conscious of in their operations – including trade and customs laws, foreign market opportunities, changes in commodity prices, and currency fluctuations – just to name a few. However, one vital consideration that exporters and importers alike often overlook is trade flows. A firm’s ability to analyze and keep a pulse on trade data pertaining to that company’s product category can provide that exporter or importer with a clear vision of what’s actually happening. This perspective can empower a firm to optimize its operations and gain an edge against competitors. For example, U.S. importers who regularly track and analyze trade data can gain an understanding of how tariff and non-tariff barriers affect imports. Similarly, U.S. exporters can track and analyze trade data to glean vital intelligence about opportunities in foreign markets. In doing so, U.S. exporters can gain an understanding of which markets their U.S. competitors are selling to and which countries demand is quickly increasing. Analyzing trade data is the first step to developing a sound import or export market strategy. However, doing so once is not enough. Importers and exporters should have a regular practice of tracking trade flow developments and restructuring operations based on what the data reveals. Such a nimble posture can truly empower businesses trading internationally.

Using U.S. Trade Databases

The U.S. government maintains several, up-to-date international trade databases. These databases provide information on annual or monthly U.S. trade flows from 1989 to the present. The databases are free and accessible to the public and are fairly easy to use. The databases reveal information such as value, volume, duties paid, dutiable value, import charges, etc.

To begin, you should first determine the Harmonized Tariff Schedule (“HTS”) code for the product(s) that you wish to track. The HTS is a globally-standardized product classification system used in international trade. To use U.S. trade databases effectively, you should determine your products’ HTS code as defined by the Harmonized Tariff Schedule of the United States (“HTSUS”). For the most accurate trade data, you should first determine the most exact HTS code that applies to your product (i.e. the full HTS subheadings at the 8-digit or 10-digit levels provide the best snapshot of trade flows in your product category). To read our crash course on the HTSUS, please click here. Once you know your HTS code(s), you can begin your research on one of the U.S. government’s trade databases.

DATAWEB

The U.S. International Trade Commission maintains DataWeb, a free trade database available to the public. All it requires is that you register an account. Of the available U.S. trade databases, Dataweb is likely the easiest to use and most intuitive. It is the best place to start your trade flow research.

USA TRADE ONLINE

The U.S. Census Bureau maintains USA Trade Online. This database is also free and available to the public. Like Dataweb, USA Trade Online also requires registering an account. Unfortunately, USA Trade Online is much clunkier to use and proves difficult for many exporters and importers. For general trade flow inquiries, Dataweb is more convenient. However, unlike Dataweb, USA Trade Online has the unique function of breaking down trade data at the state, district, and port levels. This means you can scrutinize trade flows at targeted markets (for example, see our blog article on Florida’s top three export markets). If you are the only exporter or importer of a product category in your state or district, USA Trade Online can serve as the best publically-available intelligence on how your business is performing.

GLOBAL AGRICULTURAL TRADE SYSTEM

The U.S. Department of Agriculture maintains the Global Agricultural Trade System (“GATS”), which is also a free, publically available trade database. It does not require registering an account and does not even require inputting an HTS code. GATS focuses entirely on agricultural commodities. You can use it to track trade flows and analyze trends for specific agricultural commodities, as well as the U.S. agricultural sector as a whole. Like USA Trade Online, GATS breaks down trade data by states and districts if desired. Unfortunately, GATS is useful to a small audience – those firms importing or exporting agricultural commodities. For example, a firm trading wheat could look up trade flows in wheat. However, GATS does not provide a breakdown of the many varieties of wheat products offered via HTS codes in the other two databases.

A Word of Caution: Lies, Damned Lies, and Statistics

When analyzing trade data, exporters and importers should be aware of some statistical limitations and nuances presented, so as to avoid coming to inaccurate conclusions. For starters, it should be noted that not all of the world’s trade databases are created alike. Although many countries maintain trade databases, most do not. Additionally, there are methodological differences regarding how countries calculate their trade data. For example, the U.S. and China calculate their trade data in substantially different ways. Countries report their respective trade data to a United Nations (“UN”) database known as Comtrade. Although many countries’ reported data can be found on Comtrade, these datasets are derived from different methodologies and may not be comparable. For example, the value of total U.S. exports to China as reported by the U.S. does not equate to the value of total Chinese imports from the U.S. as reported by China.

Other Statistical Considerations

Excluding Re-exports

  • Often, intermediate goods cross borders before being converted into a finished good. For example, between Detroit, Michigan and Windsor, Ontario, work-in-progress automobiles cross back and forth numerous times before they are finished goods. General trade data counts each of these shipments even when the data is redundant. If you filter for only domestic exports and imports for consumption, you can exclude this redundant data (known as re-exports) and see only new added value.

Taxes and Trade Data

Volume v. Value

  • Although trade data is often compiled and analyzed by value in U.S. dollars, value does not always tell the whole story. It would be helpful to run trade flows for your product by volume, as well, to gain another perspective on what is truly happening.

Seasonality

  • Exports and imports in most product categories exhibit some degree of seasonality. Seasonality refers to an increase or decrease in trade depending on the season. For example, imports of toys may increase during the holiday shopping season and exports of produce may increase in the summer and fall when harvests are plentiful. Analyzing trade data can reveal the seasonal trends for your product. To understand trade flows while accounting for seasonality, it is often more helpful to compare a recent month’s trade data with data from that month in a previous year rather than the preceding month (e.g. comparing July 2019 and July 2020 is preferable to comparing June 2019 and July 2020).

What about Services?

  • International trade is not limited to trade in goods. Service exports and imports comprise a major portion of U.S. trade. Unfortunately, data on services are not available in the databases described above, and government data on services trade is limited. For data on services, please consult available data provided by the U.S. Bureau of Economic Analysis.

Contact Us!

When designing your import or export strategy, be sure to consult U.S. trade databases to understand export trends pertaining to your product. If you have any questions or need any assistance running the data, be sure to contact us at info@diaztradelaw.com.

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An Introduction to U.S. Trade Databases – Best Lawyers Kenya September 25, 2020 at 2:44 pm

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