Smartphone Imports to US Surpassed $59B for First Time

U.S. importers made smartphone shipments to the U.S. a nearly $60 billion business in 2021, with the highest yearly dollar volume since 2007 when customs authorities began tracking handsets in the Harmonized Tariff Schedule’s 8517.12.00 subheading, according to Census data accessed Monday through the International Trade Commission’s DataWeb portal. Inflationary trends from supply chain woes and semiconductor shortages, plus a higher mix of 5G-enabled handsets with higher average value, likely fueled the record-high dollar volume.

Unit growth was not a factor in that trend; 2021 unit imports were 21% fewer than the record pace for 2014, when 252.79 million smartphones entered the U.S., said DataWeb. U.S. importers sourced 199.25 million smartphones from all countries last year, up 9.7% from 2020. Dollar imports in customs value terms increased 23.1% to $59.79 billion.

Key to the record-high dollar imports was the 12.2% increase in the customs value of the average phone to $300.05, according to DataWeb. It was the first year on record in which the average handset topped $300 in customs value for 12 months of shipments. Q4 smartphone unit imports increased 6.4% from the 2020 quarter to 61.06 million, and the average value was up 5.1% to $335.22.

China increased its dominance in 2021 as the top smartphone country of origin for U.S. imports, generating 80.9% of all shipments here for the year, compared with 75.9% share in 2020, said DataWeb. It was China's highest share since 2018, a year before then-President Donald Trump began threatening Section 301 tariffs on Chinese smartphone imports, sending some sourcing of U.S.-bound entry-level handsets to Vietnam.

Trump earmarked smartphone imports from China for 15% tariffs on List 4B beginning in December 2019. He suspended the 4B tariffs indefinitely when the U.S.-China phase 1 trade deal took effect in February 2020, but the tariffs remain on the books as a possible Section 301 remedy for curbing Beijing's allegedly unfair trade practices.

U.S. importers sourced 161.15 million Chinese handsets in 2021, up from 137.93 million shipped here from China in 2020, said DataWeb. They were worth $304.68 on average, up 5.3% from a year earlier. For Q4, Chinese unit shipments to the U.S. were up 3.3% year over year to 49.96 million, but the average was 0.6% cheaper at $339.33.

Vietnam, the No. 2 country of origin for U.S. smartphone imports, shipped 29.44 million handsets here in 2021, 12.6% fewer than in 2020, said DataWeb. Their average value for the year soared 44.1% to $279.03. The average Vietnamese smartphone import increased 72.6% in Q4 to $338.59. Despite the double-digit decline in Vietnamese shipments for the year, Q4 unit imports from Vietnam were up 18.3% to 8.47 million handsets.

South Korea generated only 1.6% share of 2021 smartphone imports to the U.S., but unit shipments increased 50% from 2020 to 3.27 million handsets, said DataWeb. Unlike China and Vietnam, the average South Korean smartphone lost 9.8% in value from a year earlier to $519.02 -- still the costliest handsets among the various countries of origin. The Q4 trends from South Korea were even more pronounced. U.S. importers sourced 975,000 South Korean smartphones in the quarter, up 154.6% from Q4 in 2020. The average 2021 handset in Q4 was $377.85 -- 33.1% cheaper than its 2020 counterpart.