Made in America Trade Advantages 2008
Soybeans, Corn and Cotton Exports Earn US$35.4 Billion Trade Surplus
Oct 6, 2009
Pointing to America’s estimated $820 billion trade deficit in 2008, some critics call for consumer tax incentives to motivate Americans to cut back on their purchases of foreign-made products. These lobbyists claim that only by reducing imports will U.S. exports be able to catch up and turn the trade deficit into a surplus.
That outdated notion is based on mercantilism, a principle whereby countries compete to sell the most exports while restricting imports. History has proven that mercantilism simply does not work; this is even truer today with the interdependencies that exist within the modern global economy.
US Consumer Incentives Flow from Healthy Global Trade
Emerging economic titans like China, India and Brazil also depend on America for their trade cash flows. Because a healthy global economy is essential for America’s financial recovery, the U.S. is better served by focusing on selling more made-in-America exports to other countries while selectively continuing to buy scarce products most essential to the American public’s well-being.
This article looks at 30 of the leading exports in which the U.S. had positive net exports in 2008. “Positive net exports” means that the amount of money that America received in payment for a given category of exported goods was greater than the amount that the U.S. spent on importing similar products from other countries.
A positive net export number for a product is typically symptomatic of a country’s underlying competitive advantage in producing that good from a global trade perspective.
America’s Top 20 Most Profitable Exports
The following list shows 15 export categories where the U.S. had multi-billion dollar trade surpluses in 2008. The trade surplus amount shown within bracket below is the result of taking the value of exports for a product category and then subtracting the value of American imports from other countries for that same product category.
- Civilian aircraft … US$74 billion in US exports – up 1.3% from 2007 ($38.6 billion trade surplus)
- Semiconductors … $50.6 billion – up 0.3% ($24.9 billion surplus)
- Plastic materials … $31.6 billion – up 8.7% ($18.3 billion surplus)
- Electric apparatus … $30.8 billion – down 0.2% ($17.5 billion surplus)
- Other industrial supplies … $20.4 billion – up 3% ($16.9 billion surplus)
- Soybeans … $16 billion – up 53.5% ($16 billion surplus)
- Trucks, buses, special purpose vehicles … $15.8 billion – down 7.5% ($14.9 billion surplus)
- Corn … $14.6 billion – up 30.4% ($14.6 billion surplus)
- Other chemicals … $23.2 billion – up 13.5% ($14.1 billion surplus)
- Non-monetary gold … $18.7 billion – up 40.4% ($12.6 billion surplus)
- Organic chemicals … $23.2 billion – up 5.5% ($10.7 billion surplus)
- Newsprint … $12.5 billion – up 8% ($10.1 billion surplus)
- Other foods … $8.3 billion – up 14.1% ($7.6 billion surplus)
- Excavating machinery … $15.1 billion – up 17.9% ($6.6 billion surplus)
- Measuring, testing, control instruments … $21 billion – up 1.7% ($6.1 billion surplus)
- Raw cotton … $4.8 billion – up 4.9% ($4.8 billion surplus)
- Laboratory testing instruments … $9 billion – up 10.9% ($4.7 billion surplus)
- Agricultural machinery and equipment … $8.3 billion – up 32.4% ($4.3 billion surplus)
- Pulpwood … $7.9 billion – up 11.6% ($3.9 billion surplus)
- Industrial engines … $21.8 billion – up 14.1% ($3.6 billion surplus).
American-made Products Generating Highest Trade Surpluses
The above 20 made-in-USA product categories represented almost a quarter of a trillion dollars in total trade surplus for America in 2008.
Among the top 20 American exports with the highest trade surplus amounts:
- 8 product categories were capital goods (aircraft, semiconductors, electric apparatus, trucks, excavating machinery, testing instruments, and agricultural equipment)
- 7 product categories were industrial supplies (plastics, supplies, chemicals, newsprint, pulpwood and industrial engines)
- 4 product categories were agricultural goods (soybeans, corn, other foods and raw cotton)
- 1 product categories was consumer goods (non-monetary gold).
What is clear from the above lists is that America has transitioned into a supplier of product components (such as semiconductors, plastics and cotton) to other nations like China and India that manufacture final products for the American consumer.
American Agricultural Exports with Strategic Trade Advantages
Three of America’s top agricultural exports (soybeans, corn and raw cotton) empower the U.S. with strong competitive trade advantages over it trade partners.
These are all basic essentials that remain in demand regardless of the global economy, given that people have to eat and wear clothing to survive. America has proven self-sufficiency in these 3 product categories.
An interesting question is whether America can translate these competitive trade advantages into new innovative products like soybean energy drinks, corn-based fuel and all-cotton footwear that depend on relatively scarce U.S. exports.
Sources
This analysis reflects independent calculations and insights based on latest statistics from the US Census Bureau- Foreign Trade Statistics as of the date of article publication.
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