Today the BEA released data on the US’s international trade for December 2010. This is a happy coincidence for me, because I’ve just been playing around with various data to get a better sense for the ways in which international trade is contributing to the relatively good performance of the US manufacturing sector.
The big story regarding US exports over the past couple of years has been the tremendous shift in their geographical destination. Rich countries (i.e. Western Europe, Canada, Japan, and Australia) substantially reduced their purchases of goods from the US during the Great Recession of 2008-09, and have yet to fully recover. On the other hand, less developed countries such as Mexico and China have been sucking in US-made products at a growing rate. The following picture illustrates.
If we look at the dollar value of US merchandise exports by country, we see the shift in demand for US-made goods even more clearly. The overall level of US exports in 2010 was about the same as in 2007. But they were distributed very differently around the globe, with a dramatically larger share going to China (and to a lesser extent, Mexico).
Wow. That's all you can really say about China on this table.
In a follow-up post later today I’ll tie this phenomenon back to US manufacturing performance.