Across the globe, businesses of every shape and size are reopening doors and welcoming back customers. The COVID-19 pandemic disrupted economies and industries everywhere, but this unique moment of economic recovery offers U.S. companies an exciting opportunity to explore new international markets for exporting American products.
If you’re unsure how essential exporting is to our economy, consider the facts:
- Businesses that export are less likely to go out of business, record higher revenues, create more jobs, and pay higher wages than those that don’t.
- An average of 12% of the U.S. economy has consisted of exports every year for the past decade.
- The U.S. only accounts for 4% of the world’s population, which means there are plenty of markets and customers to explore.
We previously looked at the unusual export and import trends of 2020 and for 2021 will be issuing monthly updates to help us understand the economy’s performance. 2019 is also an important year for us to study, as it provides a baseline for us to understand the profile of U.S. exporters before the pandemic hit.
What goods & services does the U.S. export?
From mattresses to ice cream to financial services, the U.S. exports a huge variety of goods and services from every sector.
The United States. is globally competitive in many manufactured products. Aircraft, cars and parts, and semiconductors are our largest manufactured goods exports. Other key exports are agricultural products, with 20-25% of all food grown in the U.S. exported, and oil. Just as impressive are U.S. service exports like travel, business services, research, and intellectual property. We are the single largest exporter of services in the world; 14% of all global services exports originate here. Prior to the pandemic, U.S. travel and tourism averaged roughly $200 billion per year, and product R&D and intellectual property licensing combined averaged $144 billion per year.
What countries receive the most U.S. exports?
The largest destination for U.S. goods and services exports are Mexico and Canada, our neighbors and free trade partners in the United States–Mexico–Canada Agreement (USMCA). China, the United Kingdom and Japan also account for large shares of U.S. exports. Combined, these trade partners accounted for 43% of U.S. exports in 2019.
Where are U.S. exporters?
Exporters come from every pocket and community in the United States. Each state exports a variety of goods and greatly contributes to the diversity of American exports. For example:
- Texas is a center of oil and chemical production.
- California’s tech industry and orchards are world leaders.
- New York is a global hub for precious metals.
- Washington is a center of aircraft manufacturing.
Exporting is not just a game for the biggest states, though. Per person, South Carolina, Delaware, and Puerto Rico each export more goods than California.
What about U.S. small business exports?
Small- and medium-sized enterprises (SMEs) are the backbone of the U.S. economy: they create two-thirds of net new jobs and account for more than 40% of the U.S. economy. 97.4% of all goods exporters are SMEs. By export value, large exporters make up two-thirds of goods exports ($996 billion), while SMEs make up the remaining third ($460 billion).
What jobs are supported by exports?
U.S. exporters directly support U.S. jobs. According to ITA’s research, goods and services exports supported about 10.7 million jobs in 2019. Each $1 billion of exports supports about 5,095 jobs. Additionally, export-intensive industries pay more, on average, than those that sell mostly domestically. Workers employed in manufacturing industries that export earn 19% more than their peers who work in manufacturing industries that don’t export.
Trade with Mexico and Canada (through USMCA) and Asia support the most goods-related jobs, and trade with Europe supports the most services jobs. More manufacturing jobs are supported by the U.S.-Mexico-Canada free trade zone than by any other region.
To read the original blog by Tradeology, please click here.