Made In The USA: An Export Boom


Made In The USA: An Export Boom

Tags: exports, export, business, american, president, services, percent, countries, critical, future

Container ships are positioned under cranes at the Port of Oakland in Oakland, California. U.S. exports are up more than 30 percent from just two years ago, when President Obama set a goal of doubling U.S. exports over the next five years.
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Container ships are positioned under cranes at the Port of Oakland in Oakland, California. U.S. exports are up more than 30 percent from just two years ago, when President Obama set a goal of doubling U.S. exports over the next five years.

Container ships are positioned under cranes at the Port of Oakland in Oakland, California. U.S. exports are up more than 30 percent from just two years ago, when President Obama set a goal of doubling U.S. exports over the next five years.

Justin Sullivan/Getty Images

Container ships are positioned under cranes at the Port of Oakland in Oakland, California. U.S. exports are up more than 30 percent from just two years ago, when President Obama set a goal of doubling U.S. exports over the next five years.

In his State of the Union address two years ago, President Obama argued there were a few things the U.S. needed to do in order to recover from the economic recession.

One of them was to export more of our goods around the world.

"Because the more products we make and sell to other countries, the more jobs we support right here in America," Obama said at the time.

That night the president unveiled a new goal: double U.S. exports over the next five years, an increase that the president said will "support two million jobs in America."

Exports are critical to our future, critical to our hiring and our investment and our optimism in the future.

Most economists dismissed the pledge at the time as somewhat quixotic, but two years later, the U.S. is on pace to meet that goal. American exports are up 34 percent since the president gave that speech, and the number continues to rise.

What Is Being Exported?

One place exports are coming from is New York City, and in particular, the 30th floor of a Manhattan skyscraper on 5th Avenue and 52nd Street.

That's where the firm Kurt Solomon employs about 75 to 100 people, managing director Madison Riley told NPR producer Jeff Jones. The firm doesn't actually produce anything, however, but they do still export.

Kurt Salmon is a consulting firm, and they provide services: business advice and strategy. Increasingly, they consult for clients outside the U.S.

"In the past five years, we've seen significant increases," Riley says. He says the company is very active in China, Singapore and Japan, but also does business in Canada, Mexico, the U.K., Germany and France.

Of course, when you hear American exports, you probably don't think of consulting. Services like that account for about a quarter of exports, but the other side of American exports are things we're actually making.

Marlin Steel, a metal working business in Baltimore, employs about 30 people and makes parts that ship all across the world.

"We export to 36 countries," owner Drew Greenblatt tells weekends on All Things Considered host Guy Raz. "We're working around the clock, and we're growing."

Greenblatt says his business has almost doubled and they made $5 million in revenue last year. A lot of that business was in exports, he says. This year, they're hoping for $8 million.

"Exports are critical to our future, critical to our hiring and our investment and our optimism in the future," he says.

It's not just advanced manufacturing exports on the rise, but pork, cattle and all kinds of agricultural exports are up as well. Even American craft beer has found an export market.

Flying Dog CEO Jim Caruso says that increasingly, people all over the world are trying the beer from the Maryland-based brewery.

"We ship to Amsterdam, from there it goes to 19 countries," Caruso says. "The top countries for us are England, Sweden, Italy and the Netherlands."

So even in those top beer-producing countries, a competing American product is finding a market.

Why The Export Boom?

So why — across the entire economy – has there been an increase of more than 30 percent for exports in everything from management consulting to craft beer?

Tyler Cowen, an economist at George Mason University who has written about the American export boom, tells NPR's Raz that part of the increase, at least for the manufacturing side, is due to better technology.

"A lot of it is being driven by smart machines," Cowen says. "So the U.S. has high wage rates, which is a disadvantage, but if machines are doing a lot of the work, that doesn't matter."

China factors a lot in America's export economy, and in a recent article in The American Interest, Cowen wrote that: "As China continues to grow, America will become a bigger winner."

Because it has been more productive, Chinese wages have been going up, which is good for China, Cowen says. That, however, has diminished China's cheap labor advantage the nation has held for some time.

"Those days are somewhat in the past," Cowen says," so the United States and Mexico will become, in relative terms, more competitive. This will mean that we export more."

The president's secondary goal with the increase in exports was to also add two million jobs, but Cowen says growth has been a bit more sluggish.

"Companies have become more productive by shedding workers and lowering costs," he says. "So I don't, at the moment, view exporting as a way of creating a very large number of jobs, but it will create a lot of output and profits."

Not every business or worker is necessarily benefiting from the export boom in the U.S., and Cowen says that could ultimately lead to a polarization of economic outcomes.

"If you're an owner of capital, a business ... or someone with technical skills that works with smart machines, I'm extremely optimistic," he says. "[But] if you're someone that is not that skilled and faced with dysfunctional education and healthcare systems, then I'd say I'm fairly pessimistic."

Though it's a trend Cowen says we've already seen for decades, and it's picking up pace the today.

The Importance Of Service Exports

Another part of the export picture has to do with the increasing ease of doing business globally, and not just for business selling products, but also for businesses like management consulting firm Kurt Salmon.

A management consultant in Manhattan might not seem like the same thing as shipping a car overseas from Detroit, but the nation's top trade official, Ron Kirk, says, and the future of U.S. exports is not just in the things Americans make, but in the services they provide.

"Four out of every five Americans is now employed in the service sector," Kirk tells NPR's Raz. "Services are a critical component of our exports, and make up about a quarter of our exported goods."

These services can include everything from legal consulting, finance, architectural, information technology and even engineering. Unlike hard goods and agriculture, it is difficult to keep track of exports of services, and Kirk says the numbers might even be higher than what's reported.

The U.S. was once the largest exporter of goods, but has since been surpassed by Germany and then China. We're entering a period of time now where 95 percent of the world's consumers live somewhere other than the United States, Kirk says, and going after that title again is both a priority and an opportunity.

"As these hundreds of millions of new consumers now come of age, we have the opportunity for us both to re-balance our trade and to have an economic model that's going to be more sustainable and create jobs that Americans are looking for," he says.

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