Four years ago, American exports of goods and services were in sharp decline. By April 2009, monthly export levels had dropped $46.4 billion from their high in July 2008. The loss of foreign sales hurt businesses that were already struggling with the severe economic downturn, forcing them to lay off hundreds of thousands of workers, and contributing heavily to the spiraling unemployment of the Great Recession.
Now, in contrast, American exports are growing and unemployment is falling. With steady gains over the past three years, monthly exports are now $13.2 billion above pre-recession highs. In 2011, U.S. exports topped $2 trillion for the first time ever. As a result of increasing exports, America’s gross domestic product (GDP), the total value of the country’s goods and services, is rising, and the economy has added millions of jobs, including over half a million in manufacturing.
The shocking decline in exports four years ago and its devastating effect on employment inspired President Obama to set ambitious export goals for the United States. In 2010, Obama announced the National Export Initiative (NEI), aiming to double America’s exports by 2015 in order to create two million new jobs. Two years later, the country was on track to meet this goal, with exports growing at an annual rate of roughly 16 percent—or just slightly higher than necessary to reach the $3.1 trillion target.
The Obama administration helped foster export growth in several key ways. One was to ensure that businesses—and especially small and medium sized businesses—had access to financing. The bank bailout and the stimulus helped financial institutions make more loans, but credit was still tight during the recession. Businesses that were unable to get financing from private banks had the option of turning to the government-run Export-Import Bank. As a part of the NEI, President Obama increased the lending capacity of the Export-Import Bank by $2 billion. By 2011, $1 billion had gone towards financing small businesses, many of which were first time exporters. Because they had access to funds, businesses not only weathered the economic downturn, but emerged ready to work on an international scale.
President Obama also increased the Commerce Department’s International Trade Administration (ITA) 2011 budget by 20 percent so it could help American companies grow their export sales. This expanded budget allowed the ITA to hire more than three hundred trade experts to advocate on behalf of American companies. It also allowed the ITA to work more aggressively in emerging markets like China, India and Brazil to provide American companies with opportunities to expand in these lucrative areas.
By focusing on exports, the Obama administration ended the recession and created jobs. Driven by increasing exports, the economy is steadily improving and is poised to make even more dramatic gains.