TRADE REPORT & ANALYSIS

U.S. COMMODITIES “BIG BOOK”

Analyzing 2021 Imports & the Impact of COVID and the Global Shipping Crisis

U.S. Census data on U.S. imports in 2021, tracking monthly import values, top value-ranked imports, and top countries of origin by market share. Includes comparative data from 2020 and 2019, along with trade impact analyses. www.descartes.com | www.datamyne.com

Trade Report & Analysis

TRACKING U.S. IMPORTS AMID COVID AND THE GLOBAL SHIPPING CRISIS

World-changing events are coming fast and furious these days: a global pandemic, the shipping crisis, shortages, unsettled markets, war in Europe.

More than ever, decision makers need up-to-the-minute, accurate, and comprehensive international trade data to stay on top of the next crisis, get ahead of the competition, and be among the first to seize the opportunities as the global market remakes itself.

This report provides an overview of the U.S. market for imports in 2021 and offers examples of how trade data can point to underlying causes and emerging trends.

ABOUT THIS REPORT

Designed as a reference on U.S. import trade for port authorities, carriers, logistics providers, importers and shippers, this report reviews U.S. imports in 2021, the year in which the COVID-19 pandemic began to cede the headlines to the global shipping crisis. Data on import trade in 2019 is provided as a pre- pandemic benchmark.

Following the organization of the Harmonized Tariff Schedule of the U.S., import data is provided for each Section of the HTSUS: the month-by-month fluctuation in total value of trade in 2021 compared with 2020 and 2019, the top country sources for imports by share of value, and the top 10 value-ranked import commodities denoted by 4-digit HS code with a comparison to the previous year’s performance.

The accompanying commentary highlights sharp gains or declines in bellwether commodities, with a focus on the several shocks the international trading system has sustained since 2019: a worldwide pandemic, a capacity crisis in global shipping, volatility in strategic commodities markets, and a sharp upturn in inflation. The trade data reveals a general return to growth (as the table summarizes) after 2020’s reverses, though not in all cases to pre-pandemic levels, and the emergence of new challenges.

ABOUT THE DATA

This report is based principally on Descartes Datamyne U.S. Census data, one of more than 160 country datasets that make up the world’s largest searchable trade database covering the global commerce of 230 markets across 5 continents. Our analysis makes reference to other Descartes Datamyne datasets and the evidence of underlying data records.

In addition to Census data on U.S. import-export trade, Descartes Datamyne offers bill-of-lading data that yields transaction-level information including buyers and sellers, shipment logistics, cargo descriptions, volumes, and values. Our national datasets offer added insight into global sources for U.S. imports, including top trading partners China, Canada, and Mexico, as well as leading trading nations in South and East Asia, South and Central America, Africa, and the EU.

Descartes Datamyne data-driven commercial intelligence is used by business decision-makers and strategists to explore markets, profile customers, generate leads, identify sources of supply, and monitor micro and macro trends.

Descartes Datamyne delivers business intelligence with comprehensive, accurate, up-to-date, import and export information. Request a demo to get started.

www.descartes.com | www.datamyne.com

Section I

Live Animals, Animal Products

Overview & Digest

The value of U.S. imports of Section I increased 28.9% in 2021 compared with pandemic year 2020 (in which this trade dropped 14.3%) and 27% over pre-pandemic year 2019. After starting the year behind 2020 levels, imports began to

climb in March, reaching a peak in August. By comparison, 2020’s imports peaked in July after plummeting during a

2020’s imports peaked in July after plummeting during a Spring of COVID shutdowns. In benchmark year 2019, these imports hit their peak in May. • Top product crustaceans [HS0306] – crabs, prawns,

2020’s imports peaked in July after plummeting during a Spring of COVID shutdowns. In benchmark year 2019, these Top product crustaceans [HS0306] – crabs, prawns,

• Top product crustaceans [HS0306] – crabs, prawns, lobsters, shrimp, and crawfish – accounted for a little over a quarter of import value in this category and posted a substantial year-over-year gain of 41.2% in 2021.

FOB Value of Imports

• Down the value rankings at No. 10, mollusks made the biggest y-o-y gain of 70.5%.

Country of Origin

Impacts on Trade

Section I imports made a strong recovery from 2020 and improved significantly on benchmark year 2019. There’s some indication that this trade is returning to a more normal pattern. The shipping crunch may have depressed 2021 gains. Note, however, that the top districts of unlading for these imports, starting with New York, Los Angeles, and Miami, all posted doubledigit percentage gains in 2021. There were some signs of price inflation in seafood: gains in consumption quantity lagged gains in value for crustaceans [HS0306], with a 21.3% increase in quantity versus a 41.2% jump in value.

Section II

Vegetable Products

Overview & Digest

Section II’s vegetable products were among the select few that eked out year-over-year gains during pandemic

Section II’s vegetable products were among the select few that eked out year-over-year gains during pandemic

few that eked out year-over-year gains during pandemic year 2020. In 2021, these imports improved on 2020’s gain of 2.7% with a 12.5% increase in value. Import trade followed a similar pattern in 2019, 2020 and 2021, peaking

followed a similar pattern in 2019, 2020 and 2021, peaking in March, slowing during the summer months, then rising through year-end. • Claiming the top share – 12.4% – of Section II imports,

followed a similar pattern in 2019, 2020 and 2021, peaking in March, slowing during the summer months, then rising Claiming the top share – 12.4% – of Section II imports,

FOB Value of Imports

• Claiming the top share – 12.4% – of Section II imports, coffee [HS0901] ended 2021 up 22% over 2020. Top source for coffee, Colombia commanded a 20.2% share, followed by Brazil with 18.2% – about the same cut as in

Claiming the top share – 12.4% – of Section II imports, coffee [HS0901] ended 2021 up 22% over 2020. Top source for coffee, Colombia commanded a 20.2% share, followed by Brazil with 18.2% – about the same cut as in

followed by Brazil with 18.2% – about the same cut as in 2020. Third-ranked Switzerland boosted its share from

8.2% to 11.7% on 74% year-over-year growth in value.

8.2% to 11.7% on 74% year-over-year growth in value.

• Among the other top imports, cut flowers [HS0603], which scored a loss of 3.6% in 2020, led gains in 2021 with a 40% increase. Cut flowers rival coffee in value for Columbia, with coffee accounting for 55% and cut flowers 42.6% of this trade.

• Tomatoes [HS0702] and bananas [HS0803] slipped a fraction in 2021. A bigger loss was sustained by rice [HS1006], which fell from No. 10 in 2020 to No. 16 in 2021’s value rankings on a -26.2% decline.

Country of Origin

Impacts on Trade

Section III

Animal or Vegetable Fats and Oils and Their Cleavage Products; Prepared Edible Fats; Animal or Vegetable Waxes Overview & Digest

Overview & Digest

2021 was a year of growth for Section III imports, which increased in value by nearly a half over 2020, on top of a pandemic-year gain of 62.5%. The pattern of trade in 2021 was distinctly different from the two preceding years, with peaks above or just below one billion dollars in July, September, and November. • Canada is the source for virtually all (98.9%) of top value

• Canada is the source for virtually all (98.9%) of top value product rapeseed [HS1514]. Indonesia took a big leap in sourcing U.S. imports of palm oil [HS1511], closing the year with an 82% share of this trade, compared with a 59.3% in 2020.

• Leading percentage gains in value, imports of fats of bovines, sheep or goats [HS1502] were up 130.1% yearover-year.

FOB Value of Imports

• Among the top 10, only sunflower oil [HS1512] declined in value, with a fall-off in imports from Ukraine, the Netherlands and Belgium.

Country of Origin

Impacts on Trade

As is the case with other Sections covering agricultural products, volatile market prices are the critical factor in rising import value. Oilseeds were a major factor in the United Nations’ global food commodity price index reaching a six-and-a-half year high in first-quarter 2021. The scramble for scarce supplies likely contributed to the multi-peaked trade pattern. The trade data confirms a spike in prices, starting with rapeseed oil [HS1514] up 80.6% on a 11.4% gain in quantity.

Section IV

Prepared Foodstuffs; Beverages, Spirits, and Vinegar; Tobacco and Manufactured Tobacco Substitutes Overview & Digest

Overview & Digest

Imports of products categorized under Section IV recorded a 15.1% year-over-year gain in value in 2021, improving on the performance of the prior two years consistently throughout the year. In a break with past trade patterns, 2021’s imports peaked in June instead of October. With 2020’s imports managing 4% growth over 2019, the latest year improved on

managing 4% growth over 2019, the latest year improved on the benchmark by 19.7%. • Ethyl alcohol [HS2208], accounting for close to 12% of

FOB Value of Imports

• Ethyl alcohol [HS2208], accounting for close to 12% of this Section’s import value, increased 20.1% y-o-y, driven in large part by a 40.2% gain in imports from Mexico (starting with tequila), the source for 36.9% of this trade.

• Prepared or preserved crustaceans and mollusks [HS1605] led gains in this Section with a 35.4% increase. (Just as the fresh, chilled or frozen versions of these products led Section I gains.) Ranked third behind Indonesia and Vietnam as a source in 2021, Canada vaulted (over India and Thailand) from No. 5 in 2020 on y-o-y growth of 115.1%

Country of Origin

Impacts on Trade

Pandemic restrictions had a comparatively small impact on Section IV imports of preserved foodstuffs, alcoholic beverages, and bottled waters. With 37% by value sourced from North American trading partners Canada and Mexico, and much of that crossing the borders by truck or rail, the effects of the shipping crunch were also softened.

Section V

Mineral Products

Overview & Digest Section V imports, which include petroleum products, gained

Section V imports, which include petroleum products, gained 71.5% in value in 2021 compared with 2020, and 8.8% compared with 2019. 2020 saw a drop in value of 41.6% from 2019. The U.S. remained a net exporter of Section V products, but the gap between imports and exports narrowed 13.4% on comparatively slower growth of 53.3%.

narrowed 13.4% on comparatively slower growth of 53.3%. • Crude oil [HS2709], accounting for 55.5% of these

• Crude oil [HS2709], accounting for 55.5% of these imports, posted a year-over-year increase in value of 76.4%. Canada was the source for 61.7%, Mexico for 8.9%, and Saudi Arabia for 5.9%.

FOB Value of Imports

• Among the top products in the value ranking, iron ore [HS2601] imports saw the biggest gain, rising 92.8%. Imports from top source Brazil, accounting for 54.7% of this trade, more than doubled, rising 121.7% in 2021 vs 2020.

• Section V imports from Russia, a distant second to top source Canada, are mostly (75.7%) light oils and distillates [HS2010]. Russian imports posted an 88% y-o-y gain in 2021.

Country of Origin

The rising price of fuels coupled with unsettled geopolitics have only begun to reshape Section V trade. Crude oil imports surged 76.4% in dollar value on just 7.4% growth in quantity. Not to be overlooked: A 28.3% gain in Portland cement [HS2523] (matched by a 28.5% increase in quantity – so no price inflation) is an indicator of reviving construction activity.

Section VI

Products of the Chemical or Allied Industries

Overview & Digest 2021 saw a gain in Section VI imports of 12.8% compared

2021 saw a gain in Section VI imports of 12.8% compared with 2020, and 17.6% compared with 2019. This Section’s chapters cover a range of products, from inorganic and organic chemicals to several categories of finished products: pharmaceuticals; fertilizers; tanning & dyeing extracts & pigments; perfumes & cosmetics; soaps, lubricants & waxes;

pharmaceuticals; fertilizers; tanning & dyeing extracts & pigments; perfumes & cosmetics; soaps, lubricants & waxes; starches, glue & enzymes; explosives; photographic goods;

starches, glue & enzymes; explosives; photographic goods; and miscellany. About half of the Section’s trade value is generated by pharmaceuticals (57.8% in 2020, 54.3% in 2021).

FOB Value of Imports

• Among the top 10 imports in 2021, Nos. 1, 2 and 9 are pharmaceuticals, accounting for 56.6% in 2020 and 53.4% in 2021 of this tranche’s trade value. Top-ranked medicaments (except vaccines) for retail sale [HS3004] posted modest year-over-year growth of 1.8%.

• Inorganic chemicals heterocyclic compounds with nitrogen [HS2933] and nucleic acids [HS2934] recorded year-over-year declines in value of 8.7% and 5.1%, respectively. Top country of origin for these products, Ireland sustained much of the loss.

Country of Origin

• Mineral or chemical fertilizers (HS3104) gained 52.2% – the largest percentage advance among the top products.

Impacts on Trade

Section VII

Plastics and Articles Thereof; Rubber and Articles Thereof

Overview & Digest Section VII imports gained 33.4% in value in 2021 compared

Section VII imports gained 33.4% in value in 2021 compared with 2020, which ended just a hair below benchmark year 2019. Generally, articles of plastic get a boost during the traditional peak shipping season. But the year-end lift in imports in 2019 and 2020 was not repeated in 2021. • The top-value import, articles of plastics, others [HS3926]

• The top-value import, articles of plastics, others [HS3926] accounted for 13.9% of total imports and posted an 18.7% year-over-year gain in value. China was the source for 56.3% of these imports.

FOB Value of Imports

• A close second in the value ranking, rubber tires [HS4011] generated 13.7% of Section VII import value on y-oy growth of 18.2%. Thailand claims the leading share, accounting for 19.4% of these imports, followed by Canada with 10.5% and Mexico with 9.7%.

• The biggest percentage gain in value – 134.8% – was recorded by articles of apparel of unhardened vulcanized rubber [HS4015]. Malaysia was the source for 52.5% of this trade.

Country of Origin

Impacts on Trade

Section VIII Raw Hides & Skins, Leather, Furskins & Articles Thereof; Saddlery & Harness; Travel

Raw Hides & Skins, Leather, Furskins & Articles Thereof; Saddlery & Harness; Travel Goods, Handbags & Similar Containers; Articles of Animal Gut (Other than Silkworm Gut) Overview & Digest

Overview & Digest Section VII imports posted a year-over-year gain of 30.9% –

Section VII imports posted a year-over-year gain of 30.9% – recovering 2020’s 20.8% loss and improving on benchmark 2019 by 3.7%.

• Imports of luggage, handbags, wallets, etc., [HS4202], accounting for more than three-quarters of Section VIII trade, gained 37.1% in value y-o-y in 2021.

• Chinese imports of these goods [HS4202] accounted for 53.5% of consumption quantity and 25% of total value. Italian imports ranked second by value with 16.6% share on just under one percent of quantity.

FOB Value of Imports

• Among the top 10 products, articles of leather, others, used in machinery or appliances [HS4205] posted the biggest percentage drop of 61.5%. Furskins [HS4301] posted a more modest loss of 16.6% – this after growth of 2.4% in 2020. Canada is the source for about 90% of imported furskins.

Country of Origin

It’s important to remember that changing fashions can be a big factor in trade. The decline in demand for fur has had a devastating impact on this Section’s import value. Imports of raw furskins [HS4301] are down 61% from 2017 and are just 20% of their value compared with a decade ago.

Section IX

Wood and Articles of Wood; Wood Charcoal; Cork and Articles of Cork; Manufacturers of Straw, of Esparto, or of Other Plaiting Materials; Basketware and Wickerwork Overview & Digest

Overview & Digest

Section IX imports closed 2021 with a 56.8% gain in value over 2020 and 82.7% over benchmark year 2019, which was characterized by very shallow peaks and valleys. A thirdquarter surge in demand in 2020 carried over into 2021 and climbed to a peak in June before returning to levels just above 2020’s October peak. • Building materials dominate Section IX imports,

Section IX imports closed 2021 with a 56.8% gain in value over 2020 and 82.7% over benchmark year 2019, which was characterized by very shallow peaks and valleys. A thirdquarter surge in demand in 2020 carried over into 2021 and climbed to a peak in June before returning to levels just Building materials dominate Section IX imports,

• Building materials dominate Section IX imports, accounting for almost 85% of the top 10’s value.

FOB Value of Imports

• Wood sawn or chipped in lengths (HS4407), the top product generating 39.6% of this Section’s trade value,

Wood sawn or chipped in lengths (HS4407), the top product generating 39.6% of this Section’s trade value,

product generating 39.6% of this Section’s trade value, gained 71.2% in 2021. Canada’s commanding share of

gained 71.2% in 2021. Canada’s commanding share of this trade grew from 76.9% in 2020 to 80.3% in 2021. Second in the value ranking, particle board (HS4412),

gained 71.2% in 2021. Canada’s commanding share of this trade grew from 76.9% in 2020 to 80.3% in 2021. Second in the value ranking, particle board (HS4412),

Second in the value ranking, particle board (HS4412), over 90% from Canada, more than doubled in value.

over 90% from Canada, more than doubled in value.

over 90% from Canada, more than doubled in value.

• Gains were nearly universal across all products. Among the top 50 in the value ranking, only two products posted losses: cooper’s products (barrels and casks) [HS4116] down 20.2% and railway sleepers or crossties [HS4406] down 8.6%.

Country of Origin

Impacts on Trade

As noted above, imports of this Section’s products are a bellwether for construction activity – in this instance, a sign of surging demand in excess of available supply. The big bump in the middle of the 2021 was the result of record-high prices – captured by the data showing a 117.9% surge in value on a 12.4% increase in quantity of particle board [HS4410].

Section X

Pulp of Wood or of Other Fibrous Cellulosic Material; Waste and Scrap of Paper or Paperboard; Paper and Paperboard and Articles Thereof Overview & Digest

Overview & Digest

After a slow start, with trade value trailing 2020 and 2019 in January, Section X imports regained momentum in 2021. At year-end, total imports were valued 17.3% higher than 2020 (a year that saw a 9.8% decline), and 5.7% over 2019. • Top-ranked by value, wood pulp, soda & sulfate [HS4703]

• Top-ranked by value, wood pulp, soda & sulfate [HS4703] also led growth among the top 10, with a 37.8% gain. Canada accounted for 50.06%, Brazil for 39.4% – a shift from 2020, when Canada was the source for 55.6% and Brazil for 35.2%.

FOB Value of Imports

• Top product by value in 2020, cartons, bags & other packing containers [HS4819] slipped into second place on 18.9% growth.

Country of Origin

Impacts on Trade

The decline in toilet paper [HS4818] might well be viewed as a hopeful sign that pandemic-era hoarding is behind us. Generally, however, tight global markets pushed prices for Section X’s wood pulp and pulp products to record levels resulting in substantial trade value growth. This was especially true of wood pulp [HS4703] which ranked No. 2 behind cartons, bags & other containers [HS4819], in 2020, then move up to No. 1 in 2021 on a 37.8% gain in value against a 2.1% gain in quantity.

Section XI

Textile and Textile Articles

Overview & Digest

Section XI’s apparel imports have yet to fully recover from COVID. After a slow start, 2021 imports climbed to an October peak 7.2% above 2020, and 13.5% higher than October 2019. But a 7.3% year-over-year gain for 2021 compared with 2020 shrinks to 3.8% when compared with pre-pandemic 2019. • Top-ranked by value, sweaters, pullovers & sweatshirts

Section XI’s apparel imports have yet to fully recover from COVID. After a slow start, 2021 imports climbed to an October peak 7.2% above 2020, and 13.5% higher than October 2019. But a 7.3% year-over-year gain for 2021 compared with 2020 shrinks to 3.8% when compared with Top-ranked by value, sweaters, pullovers & sweatshirts

• Top-ranked by value, sweaters, pullovers & sweatshirts [HS6110] accounted for 12.2% of Section XI imports and posted a 30.9% y-o-y increase in trade value.

FOB Value of Imports

• Erstwhile No. 1, made-up articles of textiles [HS6307], accounting for 17.3% of these imports in 2020, fell to No. 6 on a 64.5% drop in value. Garments of felt or other nonwovens [HS6210], No. 4 in 2020, fell to No. 11 on a 52.8% loss.

• Generally, the top 50 products posted double-digit growth in 2021 compared with 2020. But some of the gain was making up for 2020’s loss, including declines of 2.41% for sweaters & pullovers [HS6110], 13.7% for women’s & girls’ ensembles [HS6204], and 12.8% for men’s & boys’ suits [HS6203].

Country of Origin

Pandemic-driven shutdowns in Asian production centers, exacerbated by the shipping crunch, created shortages in Section XI’s apparel products. There is little sign of big jumps in price among top-value products in 2021 – that is, changes in value tended be in step with changes in quantity. But for the Section as a whole, 2021’s modest gain in value of 7.2% was achieved despite a 42.7% drop in consumption quantity, suggesting myriad small price adjustments. The pandemic era’s shift by stay-at-home workers from business attire to leisurewear is likely at the root of declining imports of suits and ensembles for women [HS6204] and men [HS6203].

Section XII

Footwear, Headgear, Umbrellas, Sun Umbrellas, Walking Sticks, Seatsticks, Whips, Riding-crops and Parts Thereof; Prepared Feathers and Articles Made Therewith; Artificial Flowers; Articles of Human Hair FOB Value of Imports Overview & Digest

Overview & Digest Starting in March, the value of Section XII imports in 2021

Starting in March, the value of Section XII imports in 2021 clearly outpaced that of 2020 but slipped below 2019 levels May through July. At year-end, total value was a 31.5% improvement over 2020, but just 3.5% better than 2019.

FOB Value of Imports

• The top-value import, footwear with leather uppers [HS6403] accounted for 31.1% of the Section’s value in 2021 and posted a gain of 26.9%. No. 2 in the value ranking, footwear with textile uppers [HS6404] claimed a 26.5% share and growth of 29%.

• Gains were the rule for all 4-digit HS codes covered in this Section.

• China continues as the leading source for U.S. imports of Section XII, with a 46.6% share of this trade in 2021 as

of Section XII, with a 46.6% share of this trade in 2021 as in 2020. Second-ranked Vietnam lost share, from 26.8%

of Section XII, with a 46.6% share of this trade in 2021 as in 2020. Second-ranked Vietnam lost share, from 26.8%

in 2020. Second-ranked Vietnam lost share, from 26.8% in 2020 to 23.7% in 2021. Imports from both countries

in 2020 to 23.7% in 2021. Imports from both countries

in 2020 to 23.7% in 2021. Imports from both countries fell in 2020, but the value of Chinese imports in 2021 was -9.5% behind 2019, while Vietnam’s 2021 recovery

was -9.5% behind 2019, while Vietnam’s 2021 recovery yielded an 11.7% gain over 2019.

was -9.5% behind 2019, while Vietnam’s 2021 recovery

Country of Origin

Impacts on Trade

The trade data shows that leather footwear [HS6403] commands a higher price than footwear with textile uppers [HS6404], and footwear imported from Italy is pricier than footwear from China. But this has been the case for years. Further down the value ranking there appears to be some price movement. Hats [HS6505] gained 28.7% in value while consumption quantity rose 7.8%. Imports of headgear [HS6505] declined in quantity by 6.3% while posting a 31.2% gain in value.

Section XIII

Articles of Stone, Plaster, Cement, Asbestos, Mica or Similar Materials; Ceramic Products; Glass and Glassware Overview & Digest

Overview & Digest

As is the case with Section IX wood products, Section XIII imports serve as an indicator of construction activity. The value of this trade increased 25.9% in 2021 compared with 2020 – a year in which pandemic-related disruptions caused an 8.2% decline from benchmark 2019. Section XIII import values beat the benchmark year by 15.6%. • Import values rose across all three of this Section’s

• Import values rose across all three of this Section’s Chapters – articles of stone, plaster, cement, etc. (Chapter 68) gained 25.8%; ceramic products (68), 28.8%; and glass & glassware (70), 23.8%.

• Growth in consumption quantity lagged value gains – especially in ceramic products, where quantity declined 1.3%, suggesting a sharp increase in prices.

FOB Value of Imports

• China’s leading share of this trade increased from 32.8% to 34.4% on 35% growth in value, accompanied by 18% increase in quantity. No. 2 source Mexico ceded a fraction of share on more modest value growth of 22.1%

China’s leading share of this trade increased from 32.8% to 34.4% on 35% growth in value, accompanied by 18% increase in quantity. No. 2 source Mexico ceded a fraction of share on more modest value growth of 22.1%

fraction of share on more modest value growth of 22.1% – but that growth was achieved on shipping less than

– but that growth was achieved on shipping less than half of the quantities delivered in 2020.

– but that growth was achieved on shipping less than

Country of Origin

Impacts on Trade

According to industry reports, Section XIII imports have yet to rebound fully as commercial construction remained stalled during 2021’s pandemic hangover. Imports of products such as ceramic sinks & toilets [HS6910] were largely driven by demand from stay-in-place homeowners for repair, re-pipe and upgrade projects. Supply chain issues also helped curb import growth in 2021.

Section XIV

Natural or Cultured Pearls, Precious or Semiprecious Stones, Precious Metals, Metals Clad with Precious Metal, and Articles Thereof; Imitation Jewelry; Coin Overview & Digest

Overview & Digest

Section XIV imports closed 2021 with a total value of trade

Section XIV imports closed 2021 with a total value of trade

Section XIV imports closed 2021 with a total value of trade below that of 2020. The year-over-year 10.2% drop in import value was accompanied by a 13.4% increase in quantity – an

value was accompanied by a 13.4% increase in quantity – an indicator that falling prices were the cause of the decline. While 2021 closed with a 10.2% y-o-y decline, it finished 64% higher than benchmark year 2019. Pandemic year 2020 saw the value

than benchmark year 2019. Pandemic year 2020 saw the value of Section XIV imports surge 82.6% above that of 2019.

FOB Value of Imports

• The volatility in the price of gold, is reflected in last year’s steep drops of 60% for gold [HS7108] and 62.8% for articles of precious metal [HS7115]. Ranked No. 1 and No. 2 by value in 2020, and accounting for 55.9% of total

The volatility in the price of gold, is reflected in last year’s steep drops of 60% for gold [HS7108] and 62.8% for articles of precious metal [HS7115]. Ranked No. 1 and No. 2 by value in 2020, and accounting for 55.9% of total

No. 2 by value in 2020, and accounting for 55.9% of total

value in 2020, these commodities slipped to Nos. 4 and 5, and contributed 24.2% of the year’s value.

value in 2020, these commodities slipped to Nos. 4 and 5, and contributed 24.2% of the year’s value.

• Similarly, the May 2020 value spike – a 25.6% surge from April, and 227% higher than January – was due to elevated prices for the same two products, gold [HS7108] and articles of precious metal [HS7115], which together accounted for 87.2% the value of trade that month.

Country of Origin

Impacts on Trade

In times of uncertainty – such as 2020’s global pandemic – the gold bugs multiply. As 2021 promised greater economic certainty and sounder investments, the price and demand for gold – and the commodity’s disproportionate impact on import value – receded. There are now signs of renewed pressure on the price of gold (and, to a lesser extent, silver) as war in Ukraine and inflation roil the economy.

Section XV

Base Metals and Articles of Base Metal

Overview & Digest

Section XV’s metals imports came roaring back in 2021 with a 48.4% year-over-year gain in value. This after a pandemic year that lagged 2019 by 14%. 2021’s year-end value growth made up for 2020’s loss and improved on 2019 by 27.6%. • With very few exceptions, gains in value were recorded

• With very few exceptions, gains in value were recorded across all the Section’s categories. Not until well down the value ranking, titanium and articles thereof [HS8108] at No. 65, accounting for less than a third of a percentage point, was a y-o-y loss (of 18.2%) recorded.

FOB Value of Imports

• The gains in value were not, however, distributed evenly and the value ranking changed substantially. Moving up: Aluminum [HS7601] rose to No. 1 from No. 2 in 2020 on a 64.5% increase in value. Refined copper & alloys [HS7433] more than doubled in value, boosting these imports to No. 2 from No. 6 a year ago. Slipping down: No. 3 mountings and other hardware [HS8302] was No. 1 in 2020. Structures (excluding prefabs) of iron & steel [HS7308] stepped down from No. 3 to No. 6.

• Among the top 10, flat-, hot-rolled iron or steel products ≥ 600 mm wide [HS7208] chalked up the biggest percentage increase – 282.1% – and vaulted from No. 27 in 2020’s rankings to No. 10 in 2021.

Country of Origin

Impacts on Trade

Section XVI Machinery and Mechanical Appliances; Electrical Equipment; Parts Thereof;

Machinery and Mechanical Appliances; Electrical Equipment; Parts Thereof; Sound Recorders and Reproducers, Television Image and Sound Recorders and Reproducers, and Parts and Accessories of such Articles Overview & Digest

Overview & Digest

Section XVI’s machinery and electrical equipment covers a broad range of consumer electronics including laptops, tablets, and mobile phones. The value of these imports was 18.6% higher in 2021 compared with 2020 (a year in which their value receded by 4.3%), and 13.5% higher than in 2019. • At the top of the value ranking, ADP machines – a.k.a.

FOB Value of Imports

• At the top of the value ranking, ADP machines – a.k.a. desktops, laptops and tablets – grew in y-o-y value by almost 11% while consumption quantity chalked up a comparable gain of 9.7%.

• Third-ranked electronic integrated circuits [HS8542], a product category that includes microchips, gained 30.2% in value while consumption quantity increased 33.8%

• In contrast, at No. 5, TV sets [HS8528] gained 21.5% in value even as quantity declined 3.33%, an indicator of short supplies and rising prices.

Country of Origin

Impacts on Trade

At the height of the pandemic, stay-at-home orders gave a boost to demand for consumer electronics. That demand appears to have continued unabated in 2021, but supply chain issues delayed gratification and pushed prices for scarce products higher. At the four-digit HS code level, electronic ICs [HS8542] the data gives little indication of the microchip shortage. At the six-digit level – processor and controller ICs [HS854231] – the data reveals a downturn in value of 4.1% accompanied by a fall-off in quantity of 7.8% in 2020. Chips posted a 28.4% gain in value versus 15% in quantity, indicating some price inflation.

Section XVII

Vehicles, Aircraft, Vessels and Associated Transport Equipment

Overview & Digest As the line chart makes clear, Section XVII imports have yet to

As the line chart makes clear, Section XVII imports have yet to recover fully from 2020’s reversals. This trade gained 9.5% in value in 2021 against 2020 – but that was a year that posted a 17.7% decline from 2019. At year-end 2021, value of Section XVII imports remained 9.9% below the level set in 2019. • Cars and other motor vehicles [HS8703] accounted

• Cars and other motor vehicles [HS8703] accounted for slightly more than half of Section XVII imports in 2020, and just under 50% in 2021, with a year-over-year increase in value of 2.5%.

FOB Value of Imports

• Motor vehicle parts & accessories [HS8708] gained share, rising from 19.3% to 21.6%, with a substantial 22.8% increase in trade value. This product category achieved the biggest dollar gain – $12.5 billion – among the top ranked products.

• Imports from top source Japan were comparatively flat, rising 0.52%. More substantial gains were posted by Germany, up 13.1%, and South Korea, up 8.3%.

Country of Origin

• The value of this trade with North American partners declined: imports from second-ranked Mexico slipped 0.82%. Canadian declined 13.6%.

Impacts on Trade

Assembly line shutdowns triggered by rising COVID case rates, followed by shortages of key inputs (see microchips in Section XVI) have stalled the automotive industry’s recovery. Automakers produced about 8 million fewer vehicles than planned in 2021. According to CPI data from the U.S. Bureau of Labor Statistics, price inflation for new cars hit 5.56% in 2021 and is projected to rise to 8.05% in 2022.

Section XVIII Optical, Photographic, Cinematographic, Measuring, Checking, Precision, Medical or

Optical, Photographic, Cinematographic, Measuring, Checking, Precision, Medical or Surgical Instruments and Apparatus; Clocks and Watches; Musical Instruments; Parts and Accessories Thereof Overview & Digest FOB Value of Imports Section XVIII imports recorded a year-over-year gain in

Section XVIII imports recorded a year-over-year gain in value of 18.4% in 2021 compared with prior year 2020. At the height of the pandemic in 2020 these imports declined in value by 7.2%. Imports in 2021 recovered that loss and bettered 2019’s value by 9.9%.

• Top-ranked by value, medical instruments & appliances [HS9018], accounting for 28.1% of this Section’s import trade value, closed out 2021 16.7% ahead of 2020. Mexico is the top supplier of medical instruments to the U.S. with a 27.2% share this trade.

• At No. 2, orthopedic appliances, prostheses & aids [HS9021] accounted for 12.8% of total import value. Growth in value of 20.4% against a decline in quantity of 0.35% suggests price inflation in this product category. Ireland was the source for about 30% by value of these products in 2021.

Country of Origin

Impacts on Trade

Dominating this Section’s top-value products, instruments, appliances, and apparatus for medical applications saw demand drop as healthcare providers concentrated resources on the pandemic. Successive waves of coronavirus continued to hamper recovery in 2021. The apparent increase in prices for orthopedics devices may be due to a year-over-year increase of 157% in pipeline products – i.e., new products in clinical trials, awaiting approval or already approved in some countries – reported by GlobalData.

Section XIX

Arms and Ammunition; Parts and Accessories Thereof

Overview & Digest

The value of U.S. imports of Section XIX’s weapons and ammunition gained 42.6% in 2021 compared with a year earlier. This trade barely faltered during the pandemic, climbing 35.1% in 2020. Two consecutive years of strong growth resulted in 2021 trade value 92.7% higher than 2019. • Accounting for a little over 30% of Section XIX’s total

• Accounting for a little over 30% of Section XIX’s total value, munitions [HS9306] gained 48.5%. Top sources were Russia (10.3%), the U.K. (10%), and Germany 9.3%.

FOB Value of Imports

• Parts & accessories of firearms [HS9305], accounting for 22% of the Section’s import value, advanced 29.6% in 2021. Austria (with a 9.9% share of this trade), Taiwan (7.8%) and Italy (7.7%) were top countries of origin.

• Swords, cutlasses, bayonets & lances [HS9307] scored the biggest percentage increase – 68.6% – in trade value. China dominates this trade, accounting for 65.4% of the import value of these goods.

Country of Origin

Impacts on Trade

The U.S. is a net importer of munitions, firearms and other weapons of Section XIX. While some products are made for consumer markets (e.g., sporting rifles), most of these imports are for military or law enforcement use. The market for these products is driven by national and local defense and public safety policies and budgets. Geopolitics can reshape this market abruptly and dramatically. The partners to this trade – especially in Europe – have begun to reorder priorities in the wake of the Ukraine war.

Section XX

Miscellaneous Manufactured Articles

Overview & Digest After a relatively shallow decline during the shutdown of

After a relatively shallow decline during the shutdown of Spring 2020, imports rallied through December, limiting that year’s loss to -0.56%. Imports consistently improved on 2020’s performance throughout 2021 (albeit just barely in October). The year finished 27.2% ahead of 2020, and 26.5% better than 2019. Trade in all three years peaked in October. • Furniture & furnishings [HS94] generally accounts for

• Furniture & furnishings [HS94] generally accounts for about 60% of Section XX import value, and toys, games, sporting goods, & seasonal decorations [HS95] around 35%. In 2021, furniture slipped a few points to 56.8%, while toys & games accounted for 37.5% of this trade.

FOB Value of Imports

• Video games [HS9504], which ranked sixth by value, accounted for 7.9% of this Section’s imports, posted a 34.9% gain in 2020, and continued to see strong growth in 2021. At year-end, video games moved up in rank to No. 4, claimed a 9.4% share on a 49.7% gain in value.

• China continues to dominate this trade, though its 53.2% share is much reduced from 2020’s 72.4%. Mexico, the second-ranked source as recently as 2019, fell to No. 3 behind Vietnam in 2021.

Country of Origin

Impacts on Trade

2021 supply chain issues delayed new furniture orders for months and prompted retailers to warn shoppers to place their orders well ahead of the yearend holidays. In the end, consumers committed to feathering their nests and fulfilling their kids’ wish lists delivered solid growth in import value of Section XX mainstays, furniture, and toys. The October peak in imports runs counter to predictions that the post-pandemic shipping crunch will permanently flatten the traditional peak shipping season.

Section XXI

Works of Art, Collectors’ Pieces and Antiques

Overview & Digest The imports of Section XXI chalked up a 59.3% gain in value

The imports of Section XXI chalked up a 59.3% gain in value in 2021, the largest percentage gain of any Section – but not enough to recover from 2020’s 55.5% plunge. Last year’s import value was 29.2% below that of 2019. • Paintings, drawings & pastels by hand [HS9701],

• Paintings, drawings & pastels by hand [HS9701], accounting for 73.7% of the value of this trade, ended 2021 with a 67.6% gain.

• Ranked No. 2 by value, original sculptures [HS9703] contributed 11.5% of the Section’s import trade value and improved on 2020’s performance by 55%.

FOB Value of Imports

• This is transatlantic trade, even when the artwork or artifacts originate outside Europe. France is the leading source for Section XXI goods. Within this category, France is the top supplier of paintings [HS9701] and sculptures [HS9703]. The U.K. leads as a source for antiques [HS9706], collectors’ pieces [HS9705], and original engravings [HS9702]. Switzerland is the country of origin for postage or revenue stamps, postmarks & first-day covers [HS9704].

Country of Origin

The pandemic had a devastating impact on the art market. The International Council of Museums estimates that 6.1% of museums globally faced permanent closure. According to an Art Basel-UBS survey, virtually all galleries closed, and sales contracted 36% on average during the first half of 2020. The world’s top market for art, the U.S. saw sales rebound 33% in 2021, with gallery sales increasing 18% overall and public auction sales up 47%.

Section XXII

Special Classification Provisions; Temporary Legislation; Temporary Modifications Proclaimed Pursuant to Trade Agreement Legislation Overview & Digest

Overview & Digest

Section XXII imports – a miscellany of goods subject to special tariff treatment – closed 2021 with a year-over-year gain in value of 18.3% over 2020 and a smaller improvement over 2019 of 6%. These imports declined 10.3% in the pandemic year of 2020. • The bulk of this trade – 92.7% – involves articles moving

• The bulk of this trade – 92.7% – involves articles moving

• The bulk of this trade – 92.7% – involves articles moving across borders for repairs to be returned to their source [HS9801]. Canada is the top trading partner in crossborder repair [HS9801] accounting for 16.8% by value in 2021. Ireland, ranked fifth in 2020, with a 6.8% share of this trade, vaulted to No. 2, with a 12.4% share on a 166.5% gain in 2021. Japan stepped into the No. 3 position with a 10.1% share and a stunning 224.1% increase in value

The bulk of this trade – 92.7% – involves articles moving across borders for repairs to be returned to their source [HS9801]. Canada is the top trading partner in crossborder repair [HS9801] accounting for 16.8% by value in 2021. Ireland, ranked fifth in 2020, with a 6.8% share of this trade, vaulted to No. 2, with a 12.4% share on a 166.5% gain in 2021. Japan stepped into the No. 3 position with a 10.1% share and a stunning 224.1%

FOB Value of Imports

• Equipping and repairing cargo vessels requires an exchange of goods. If the exchange happens abroad, duties are payable when the vessel first enters a U.S. These special-purpose exchanges [HS9818] virtually stopped, dropping 99.9% in 2021.

Country of Origin

Most of the imports covered by Sections XXII tariff codes appeared to be returning to prepandemic levels in 2021. One exception: The materials and equipment that go into repairing a vessel and, when purchased abroad, are subject to duties when the vessel first arrives in a U.S. port [HS9818]. The steep decline is likely the result of the pandemic and its after-effects. In 2020, shipyards around the world shut down and/or severely limited access to foreign vessels. Even as COVID restrictions eased in 2021, the shipping crunch created supply chain issues, played havoc with carriers’ schedules, and gridlocked shipyards.

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The Descartes Systems Group Inc. | TSX: DSG | NASDAQ: DSGX | 120 Randall Drive, Waterloo, Ontario, N2V 1C6, Canada Toll Free 800.419.8495 | Int‘l 519.746.8110 | info@descartes.com | www.descartes.com © The Descartes Systems Group, Inc. All rights reserved.