After a strong start in the first part of this decade, the slowdown in export growth means the U.S. will not meet President Obama's goal of doubling exports by 2015 from 2009 levels.
Because export growth to its major overseas markets slowed so steeply last year and so far this year, the U.S. won’t be able to double its exports to the target of $3.15 trillion until 2032, or 17 years after the original target date set by President Obama in his 2010 State-of-the-Union address, Drewry Maritime Research said in its Container Insight Weekly.
That means the backhaul leg will continue to play second fiddle on U.S. container trades. This raises the question of what obligation non-U.S. ocean carriers have to meet the needs of U.S. exporters, Drewry said. There are no major U.S.-based shipping lines for domestic manufacturers to call upon.
The value of U.S. exports of all goods and services increased 17 percent in 2010, but that rate fell to 14.5 percent in 2011 and dropped even further to 4.6 percent in 2012. The most recent trade data shows that after five months of 2013, the rate is slowing further at just 1.9 percent with declining exports to the ailing EU the major drag on growth.
U.S. exports to the 27 countries that belong to the EU fell 6.3 percent in the first five months of 2013. Exports to the U.K., the fifth-largest U.S. market dropped 18.2 percent, and to Germany, the sixth-largest market, 4.8 percent.
On top of this, U.S. exports to Japan, the U.S. fourth-largest overseas market, dropped 7.3 percent in the five months through May.
The U.S. is not alone in seeing its exports slowing down. Chinese exports fell 3.1 percent year-over-year in June, the first drop since early 2012, according to data released last week by Chinese Customs. Chinese imports also declined, by 0.7 percent, for the second consecutive month. U.S. exports to China, the nation’s third-largest market, grew 3.4 percent in the first five months of the year.
Despite its commonly held image as the world’s great consumer of other countries’ products, the U.S. overtook Germany in 2010 as the world’s second-largest exporter behind China, according to the World Trade Organization.
Between 2009 and 2012, exports of U.S. goods increased 46 percent with the biggest gains coming from the automotive (79 percent) and industrial supplies (69 percent) sectors, the latter including petroleum and related products.
During this time, the fastest-growing markets for U.S. goods were Brazil and Mexico, both up 68 percent, while China — now America’s third-largest market after Canada and Mexico — grew 59 percent. In contrast, export growth to Europe floundered at below 20 percent.
The National Export Initiative, the agency tasked with facilitating Obama’s target, was set up to assist the small and medium-sized enterprises that make up the vast majority of all U.S. exporters by offering advocacy, improving access to credit and upholding international trade laws.
There has been some success on that front, with the Census Bureau reporting that number of U.S. companies exporting goods in 2011 reached a new record of 302,260 (98 percent of which were SMEs), an increase of 9 percent since 2009. While the big companies such as Boeing and Caterpillar continue to dominate in dollar terms, SMEs were responsible for a third of all U.S. goods exports with revenue in 2011 of $440.1 billion, some 42 percent up on 2009.
Although the overall trend for U.S. export sales is fairly strong and suggests that Obama’s export initiative has spurred some additional growth, Drewry said U.S. export growth of 46 percent from 2009 to 2012 was only on par with the global trend and was way below that of China, which at the same time boosted its exports by 70.5 percent.