The U.S. container trades will bounce back in the long term, and it will be exports that lead the way, according to a trade economist.
Several ongoing developments point to steady growth in exports in the coming years, including rapid economic growth among developing nations and a weak dollar compared to the currencies of those nations, said Paul Bingham, economics practice leader at CDM Wilbur Smith Associates. He said U.S. exports will be increasingly sought by a growing middle classes in China, Southeast Asia and Latin America, which view American products as having a higher quality.
In fact, Bingham contends that the U.S. could become a leader in supplying manufactured products to developing nations if small and mid-sized producers are encouraged to enter the export arena.
“The challenge for the U.S. is to match Germany’s success,” Bingham told a marine terminal management program in Long Beach sponsored by the American Association of Port Authorities.
Small and mid-size manufacturers are doing well producing and selling high-tech, precisely manufactured products in the domestic market. Those manufacturers can compete on quality with producers in Germany and other European countries. They would be especially competitive in developing nations because of the weakening dollar, Bingham said.
The economies in the developing nations of Asia and Latin America are growing at two to three times the rate of growth in the U.S., Japanese and European economies. The dollar remains weak against many world currencies, and it is depreciating the most against the currencies in emerging economies, Bingham said.
As a result, all U.S. exports are becoming increasingly affordable for the growing middle classes in those countries. U.S. agricultural exporters are already profiting from these developments, and manufacturers would also do well if more companies produced for the export market.
Exports to China, already strong, would increase even faster if China allowed its currency to increase more rapidly against the dollar, but calls in Congress for legislation to punish the Chinese for holding back the value of the yuan is not the way to proceed on this issue, Bingham said.
The yuan has appreciated 7 percent so far this year against the dollar, but any move to punish China would invite retaliation, he said.