Trade deficit with US due to re-exports

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In 2016, the Netherlands’ goods trade deficit with the US hit 12 billion euros, i.e. Dutch imports of goods exceeded exports. The trade deficit can be attributed almost entirely to large re-export flows. When only taking into account Dutch imports for domestic use and US imports of Dutch-manufactured goods, the deficit amounts to 0.6 billion euros. Statistics Netherlands (CBS) reports this on the basis of new research.

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In 2016, the Netherlands imported 27.4 billion euros worth of goods from the US. A major share left the country again in the form of re-exports. This means that US goods were re-exported by the Netherlands to third countries after having undergone minimal processing where necessary. For example, a Dutch company purchases mobile phones from the US and sells them to the hinterland. In 2016, imports from the US destined for subsequent re-exporting represented a total value of 16.9 billion euros. A minor share of goods imported from the US (10.5 billion euros) was destined for domestic use, including consumption, investments or as input in manufacturing.

Nearly two-thirds of exports to US are Dutch-manufactured

Dutch exports to the US amounted to 15.3 billion euros; over one-third represented re-exports and nearly two-thirds were exports of Dutch-manufactured goods (e.g. beer or machinery). Adjusted for re-exports, the trade deficit with the US stood at 0.6 billion euros. This is the difference between the export of Dutch goods to the US and the import of goods from the US destined for the Dutch market. In other words, the Netherlands spent slightly more on US-manufactured goods for domestic use in 2016 than the US spent on Dutch-manufactured goods.

On balance, the Netherlands enjoys a goods trade surplus, i.e. exports exceeding imports. Re-exports play a significant role in the Dutch goods trade surplus. In 2016, approximately 36 percent of the surplus was caused by re-exports.

Much of the medical technology destined for re-exports

The import value of goods arriving from the US and leaving the Netherlands as re-exports amounted to nearly 17 billion euros but represented a limited number of goods. The top ten groups of goods accounted for 54 percent of the imports intended for re-exports. Medical technology leads the top ten with medical instruments and devices (2 billion euros), implants and orthopaedic articles such as prostheses (1.3 billion euros), electromedical or radiological devices and pharmaceutical products (0.5 billion euros each). Other high-tech products in the top ten included telecommunication equipment (1.6 billion euros) and computer parts (0.7 billion euros).

Most important for the Dutch market were imported aircraft (2.3 billion euros), car parts, machine parts (0.5 billion euros each) and computer components (0.4 billion euros).

Strong increase in imports from the US

The value in current prices of Dutch imports from the US has increased sharply since 2005. This applies to both imports intended for the Dutch market (from 6.4 to 10.5 billion euros) and imports destined for re-exports (from 11.7 to 16.9 billion euros). The most notable increase in imports for the domestic market was in imports of aircraft. In terms of re-exports, it mainly concerned telecommunications equipment and medical instruments and devices.

During the same period, the total value of exports to the US rose much less rapidly. This applies to both re-exports and exports of Dutch-manufactured goods. An exception were exports of specialised Dutch machinery to the US, which rose substantially.

The Dutch goods trade deficit with the US has widened significantly since 2005 (from 5.7 to 12 billion euros). In the span of eleven years, the net trade balance (excluding re-exports) swung from a Dutch trade surplus of 1.9 billion euros to a deficit of 0.6 billion euros.