2022 11.6%
2016 11.9%
2013 13.6%
A worried look at the American export economy this afternoon, taking as a point of departure the Bureau of Economic Analysis’ first full-year 2022 estimates for American GDP:
(1) Export share of U.S. GDP is down: BEA’s “first estimate” of GDP finds $2.98 trillion in American exports last year, in a $25.5 trillion economy. The export figure combines $2.06 trillion in “goods” (cars, oil, wheat, semiconductors, planes, beef, etc.) with $0.92 trillion in “services” (software downloads, fees for architecture and telemedicine, tourism student tuition, international air cargo earnings, etc.), and made up 11.6% of U.S. GDP. The total, though above the COVID low of 10.2%, remains noticeably below not only the mid-2010s peak (13.6% in 2012, 2013, and 2014) but the 2007-2018 average of 12.6%.
(2) U.S. share of world exports is also down: The World Trade Organization and IMF have not yet published tallies of worldwide exports for 2022. But comparing their figures for 2021 with those of 2016, the WTO’s World Trade Statistical Review report shows that in 2016, the U.S.’ share of the year’s $16.0 trillion in world goods exports was 9.1%, and the U.S.’ share of the $4.8 trillion in commercial services exports was 15.2%. In 2021, the comparable figures were 7.9% of $22.3 trillion in goods and 12.9% of $6.0 trillion in services. Sifting a little more finely, from 2016 to 2021 the American share of world manufacturing exports fell from 8.6% to 7.3%, and of agricultural exports from 10.4% to 9.4%. Or by region, the IMF’s “Direction of Trade Statistics” database reports that in 2016 American factories, farms, and mines supplied 8% of exports to Asia, 33% of exports to Latin America, and 5.3% of exports to sub-Saharan Africa, while (b) in 2021, the figures were 7%, 31%, and 5.1%.
(3) Most recent U.S. export growth in natural resources: Looking more closely at the things Americans were selling, the eleven months of Census Bureau trade data available for 2022 show that nearly half of all U.S. export growth since 2016 — about $290 billion of $610 billion, unless the December figures reveal some unexpected and drastic shift in direction — is in crude oil, natural gas, and refined petroleum. This has reordered the top tier of American exports. Where in 2016 the top five U.S. exports* were airplanes, refined oil, and automobiles, followed by auto parts and integrated circuits; and in 2022 the top five were refined petroleum products, crude oil, and natural gas — together accounting for about $380 billion of the $2.07 trillion in goods exports — with planes and cars now ranked respectively fourth and fifth.
(4) Fewer exporting businesses: And perhaps reflecting this greater concentration of exports in energy, the U.S. export community has shrunk from a mid-2010s peak of 305,000 exporting companies to 290,600 by 2016, and (again with some rebound from a Covid low in 2020), to a preliminary count of 277,500 in 2021.
What to make of this?
Dramatic terms like “inflection point” or “crisis” feel premature. The GDP share of exports is not far below the pre-pandemic level. With growth in 2021 and 2022 heavily driven by federal fiscal stimulus and the post-crisis consumer boom, some erstwhile U.S. exporters may simply have decided to concentrate on local customers for a while. And despite un-robust export figures in the second half of 2022, American manufacturers hired pretty enthusiastically and farmers got reasonably good income. Perhaps, with fiscal stimulus fading and consumers now pulling back, companies will return to exporting and the trade stats will improve in 2023.
On the other hand, perhaps not. If there isn’t yet a case for “drama” and “crisis,” one for “concern” and “guarded pessimism” seems reasonable. In this reading of the trends, policy is taking a toll. On one hand, the tariff increases in 2018 and 2019 mainly fell on industrial inputs, and so to some extent raised costs for U.S. factories and ag producers as well as eliciting foreign retaliations against U.S. exports. On the other, the trade policy environment, especially in Asia, is turning against U.S.-based farms and factories as intra-Asian tariffs fall and technical standards become more compatible through the implementation of the two big regional trade agreements CPTPP and RCEP. All grounds, at least, to look back at the trends of the last five years, and ahead to the next years, with concern.
* At HTS-4 level. Using NAICS-4 the top-five count is slightly different: aerospace, petroleum and coal products, automobiles, pharmaceuticals, and auto parts in 2016; oil and gas, petroleum and coal products, aerospace, pharmaceuticals, and basic chemicals in 2021.
The Bureau of Economic Analysis’ GDP database, with (among lots else) export and import totals and shares of GDP.
Census “FT-900” series has the basic monthly trade figures, complete through November with the December (and thus full-year 2022) release next Tuesday.
… and the accompanying “Historical Series” with a convenient one-page summary of annual imports, exports, and balances from 1960 through 2021, also (hopefully) to be updated for 2022 on Tuesday.
… and also from Census, the “Profile of Importing and Exporting Companies” releases a count of exporters and importers by size, with state-by-state figures, SMEs, 25 countries, sectors, etc.
World perspective:
The WTO’s World Trade Statistical Review series.
And the IMF’s Direction of Trade Statistics.
And in Asia:
ASEAN announces entry into force for the Regional Comprehensive Economic Partnership, 2021.
P.M. Fumio Kishida reviews Japan’s Asian strategy, with thoughts on the U.S. alliance, nuclear weapons, China relationship, CPTPP, and the potential economic role of the U.S.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
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