7 Reasons Why the United States is a Top Exporter of Goods
The United States is one of the world’s largest exporters of goods, ranking second only to China in 2021. According to the World’s Top Exports website, the US shipped $2.061 trillion worth of goods around the globe in 2021, accounting for 11.9% of the global total. But what makes the US such a successful exporter? Here are seven reasons why the US is a top exporter of goods.
1. Diversified export products:
The US exports a wide range of products, from mineral fuels and machinery to vehicles and pharmaceuticals. This diversity helps the US to meet the demand of different markets and reduce its dependence on a single product or sector. In 2021, the top 10 export categories of the US represented 70.4% of the overall value of its global shipments, suggesting a balanced mix of exported goods.
2. Innovation and technology:
The US is a global leader in innovation and technology, producing high-quality and cutting-edge products that are in high demand worldwide. The US ranks first in the world in research output, according to the Economic Complexity Index (ECI), and 25th in technology, reflecting its ability to create and use complex knowledge. Some of the US’s top export products, such as aircraft, spacecraft, medical instruments, and integrated circuits, reflect its technological prowess.
3. Strong domestic market:
The US has a large and affluent domestic market that supports its export sector. With a population of 330 million people and a GDP per capita of $63,416 in 2021, the US is one of the biggest and richest markets in the world. The US domestic market provides a strong base for production, consumption, and innovation, as well as a source of feedback and demand for exported goods.
4. Competitive advantage:
The US has a competitive advantage in some of the products that it exports, meaning that it can produce them more efficiently and effectively than other countries. For example, the US is among the world-leading nations for exporting refined petroleum oils, petroleum gases, and cars, according to the World’s Top Exports website. The US’s competitive advantage stems from its abundant natural resources, skilled labor force, advanced infrastructure, and favorable business environment.
5. Free trade agreements:
The US has free trade agreements (FTAs) with 20 countries, which facilitate its export activities by reducing or eliminating tariffs and other trade barriers. Some of the US’s major export destinations, such as Canada, Mexico, South Korea, and Singapore, are FTA partners. In 2021, 47% of US exports went to FTA partners, according to the Office of the United States Trade Representative.
6. Strategic location:
The US has a strategic location that enables it to access different markets and regions. The US borders Canada and Mexico by land and has coastlines on both the Atlantic and Pacific Oceans. The US also has overseas territories and military bases that extend its reach and influence. The US’s strategic location allows it to trade with its neighbors as well as with Europe, Asia, Latin America, and Oceania.
7. Soft power:
The US has soft power, which refers to its ability to attract and influence others through its culture, values, and policies. The US is widely regarded as a global superpower and a leader in democracy, human rights, and international cooperation. The US also has a strong cultural presence and appeal, thanks to its entertainment industry, media outlets, education system, and sports teams. The US’s soft power helps to create a positive image and reputation for its products and services abroad.
These are some of the reasons why the United States is a top exporter of goods. The US has a diversified, innovative, and competitive export sector that benefits from its strong domestic market, free trade agreements, strategic location, and soft power. The US’s exports contribute to its economic growth, job creation, and global influence.
United States Top Exports: A Statistical Analysis
The United States is one of the world’s largest exporters, selling a variety of goods to many countries around the globe. In this blog post, we will look at some of the statistics and trends of the US export industry, focusing on the top 10 export products and the main export destinations.
Top 10 Export Products
According to the World’s Top Exports website, the top 10 export products of the United States in 2021 were:
- Mineral fuels including oil: US$378.6 billion (18.4% of total exports)
- Machinery including computers: $229.6 billion (11.1%)
- Electrical machinery, equipment: $197.7 billion (9.6%)
- Vehicles: $134.9 billion (6.5%)
- Aircraft, spacecraft: $102.8 billion (5%)
- Optical, technical, medical apparatus: $99.1 billion (4.8%)
- Gems, precious metals: $92.5 billion (4.5%)
- Pharmaceuticals: $83.5 billion (4%)
- Plastics, plastic articles: $83.3 billion (4%)
- Organic chemicals: $51.1 billion (2.5%)
These 10 products accounted for 70.4% of the overall value of US global shipments in 2021, indicating a diversified range of exported goods, albeit three of them are energy commodities.
The fastest growing export category was mineral fuels including oil, which increased by 57.5% since 2020, driven by the recovery of global oil prices and demand after the pandemic-induced slump. The second fastest growing category was organic chemicals, which rose by 18.5%, followed by aircraft and spacecraft, which increased by 14.9%.
The United States ranks among the world-leading nations for exporting refined petroleum oils, petroleum gases and cars.
Main Export Destinations
The Observatory of Economic Complexity website provides data on the main export destinations of the United States in 2021. The top 10 countries that imported goods from the US were:
- Canada: $259 billion (12.6% of total exports)
- Mexico: $247 billion (12%)
- China: $151 billion (7.3%)
- Japan: $71.8 billion (3.5%)
- South Korea: $66.4 billion (3.2%)
- United Kingdom: $65 billion (3.2%)
- Germany: $63 billion (3.1%)
- Netherlands: $62 billion (3%)
- Brazil: $47 billion (2.3%)
- India: $41 billion (2%)
These 10 countries accounted for 53.2% of the overall value of US exports in 2021, showing a high concentration of trade partners in North America and Asia.
The largest export market for the US was Canada, which imported mainly mineral fuels including oil, vehicles, machinery and plastics from its southern neighbor. The second largest market was Mexico, which imported mainly electrical machinery, vehicles, machinery and mineral fuels from the US.
China was the third largest market for US exports, despite the ongoing trade tensions and tariffs between the two countries. The US exported mainly soybeans, crude petroleum, aircraft and semiconductors to China in 2021.
Japan and South Korea were the fourth and fifth largest markets for US exports, respectively, importing mainly aircraft, machinery, electrical machinery and medical instruments from the US.
The United States is a major exporter of goods to the world, with a diverse range of products and markets. The top 10 export products of the US in 2021 were mostly related to energy, machinery, vehicles and technology sectors, while the top 10 export destinations were mostly located in North America and Asia.
The US export industry showed a strong growth in 2021 compared to 2020, as global trade recovered from the impact of the COVID-19 pandemic.
The US faces some challenges and opportunities in its export sector, such as maintaining its competitiveness in innovation and technology, diversifying its trade partners and markets, resolving trade disputes and barriers with some countries, and adapting to environmental and social changes.
References:
https://www.census.gov/foreign-trade/Press-Release/2020pr/ft900_2012.pdf
https://atlas.media.mit.edu/en/visualize/tree_map/hs92/export/usa/all/show/2016/
https://oec.world/en/profile/country/usa/
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