…One could look at the fact that the U.S. is still the largest exporter of goods and services in the world and feel comfortable, even complacent. That would be a serious mistake.
Over the last 30 years, our economy has been increasingly driven by consumption, much of it fueled by consumer debt. Three years ago, that consumption drove our economy over a cliff. In other large economies — those of our partners and competitors — the story has been different. They have been busy creating networks and taking advantage of market opportunities around the world, while we have been content mainly to sell to one another or buy from abroad. Witness the fact that only 1 percent of American businesses export, and more than half of those export to only one market.
Exports account for less than 13 percent of our economy, much smaller, in relative terms, than in the economies of other nations. Germany came out of the Great Recession through the force of an export sector that constitutes half of its economy. The Canadian economy derives 30 percent of its GDP from exports. In China, now the second-largest economy in the world, right behind ours, exports amount to 28 percent of GDP. In fast-rising India, exports account for 22 percent. A substantial share of those nations’ exports is sold in the U.S., which has created a persistent trade imbalance.