I agree completely with President Obama’s emphasis on U. S. exports in his op-ed this morning in the New York Times:
We need to rebuild on a new, stronger foundation for economic growth. And part of that foundation involves doing what Americans have always done best: discovering, creating and building products that are sold all over the world.
We want to be known not just for what we consume, but for what we produce. And the more we export abroad, the more jobs we create in America. In fact, every $1 billion we export supports more than 5,000 jobs at home.
However, I continue to wonder whether President Obama has any feel for numbers. His stated goal is to double U. S. exports by 2015. While exporting more to Indonesia, South Korea, India, and Japan is a step in the right direction, is it possible to double our exports by doing that?
Our annual export trade is about $1.8 trillion. U. S. exports to Japan are about $51.2 billion, $12.9 billion to Indonesia, about $25 billion to South Korea, and about $17.5 billon to India. Doubling our trade to those four countries, an enormous task especially when the reality that Japan, South Korea, and India maintain a policy of holding a trade surplus with the United States is taken into account, would add less than $100 billion to our exports, not quite 10% of the target export figure. If we are to achieve that goal, we’re going to need to start thinking in terms of quadrupling exports to those countries, some of the largest economies in the world.
Conspicuously absent from the op-ed, like the ballerina at the conclusion of The Red Shoes, is China, which imports about $64.5 billion from us annually while exporting $211 billion to us. It is not that we produce nothing more that Chinese people want. China’s system of currency manipulation, subsidies, tariffs, and quotas intentionally keeps our exports to China far too low. If we could double our exports to China, we’d be getting somewhere.
That such a large proportion of our exports consists of arms is alarming but it’s a subject for another post.