US Versus India Hidden American Export Advantages

According to Census Bureau statistics, the U.S. trade deficit with India was US$4.7 billion for 2009.

That figure represents a 33.6% improvement over America’s $7.1 billion trade deficit with India in 2008. U.S. purchases of imported Indian products slumped to $21.2 billion in 2009 – a 17.8% drop from the $25.8 billion worth of Indian exports sold to the U.S. one year earlier.

Also in 2009, U.S. exports to India were down 11.8% to $16.5 billion from $18.7 billion during 2008.

U.S. Trade Surplus Versus India by Product

Sales for U.S. exports to India outpaced comparable Indian imports in 2,089 of the total 4,165 product categories that the 2 nations traded during 2009.

When a country’s exports exceed imports exchanged with another nation, that country has established a competitive trade advantage over its partner. Therefore, the U.S. posted competitive advantages in 50% of products exported to and imported from the world’s second-most highly populated nation.

Below are the top 10 American export advantages resulting in U.S. trade surpluses with India by product.

Top 10 U.S. Versus India Export Advantages

Listed below are the top 10 U.S. exports to India with the highest trade surpluses in 2009. The harmonized tariff system code for each export product category is shown within brackets.

  1. Aircraft and spacecraft including parts (code 880000) … US$2.2 billion trade surplus (down 16.3% from 2008)
  2. Diammonium phosphate chemical fertilizer (310530) … $1 billion (down 61.2%)
  3. Non-monetary gold (710812) … $642.9 million (up 29.8%)
  4. Oils from high-temperature coal tar (270799) … $417.8 million (up 13.2%)
  5. Coal (270112) … $346 million (down 4.1%)
  6. Computer modems, switches and routers (851762) … $285.2 million (down 7.8%)
  7. Iron waste and scrap (720449) … $258.7 million (up 5.3%)
  8. Gas turbines (841182) … $176.7 million (up 383.9%)
  9. Parts for boring or sinking machinery (843143) … $150 million (down 12.9%)
  10. Almonds (80211) … $138.8 million (down 1.4%).

Root Causes for U.S. Export Advantages Versus India

By servicing the needs of India’s growing aerospace industry with proven technology and engineering excellence, U.S. aircraft and spacecraft sales generated the largest American trade surplus by export product category.

The U.S. also has a billion-dollar competitive trade advantage in inorganic chemical fertilizers. American exports of diammonium phosphate are used to grow crops in India.

America also exported more non-monetary bullion to India compared to Indian gold shipments that U.S. importers bought.

Other exports where the U.S. had significant competitive advantages support a wide range of needs as the Indian economy matures.

Imported American coal remains in demand to meet Indian electrical power requirements, despite the fact that India is a leading coal-producing country. U.S. modems, switches and routers support India’s growing telecommunication infrastructure. American almond exports help feed India’s vast population partly because almonds can be shipped over long distances and stored for relatively long periods of time.

U.S. Export Trade Opportunities in India

Lower wages in India may be partly behind U.S. trade surpluses in exports of iron scrap metal, gas turbines and drilling machinery parts. Paid lower wages than in the States, Indian workers create final products from these intermediate materials and components. India exporters then ship out finished products:

  • made from recycled scrap metal
  • with gas turbine engines added
  • reassembled with boring or sinking machinery parts.

If the value of finished products that India exports back to the U.S. continues to be higher than what American exporters earn for source materials sent to India, then the U.S. trade deficit will remain high.

However, if India consumes more of the finished products made from U.S. imports or sells them to other countries, then the U.S. stands to benefit from the increased demand for products where the U.S. already has established competitive advantages.

Comparative Advantage: Definition, Theory, Examples

US Competitive Trade Advantages and Export Sales Opportunities

Comparative Advantage: Definition, Theory, Examples

In 2009, America’s international trade deficit was reduced by 37.4% to $501 trillion.

Just one year earlier, the United States paid out $800 trillion more for imported goods from foreign countries than the total earned for American exports.

Profit-minded entrepreneurs focus on those products in which the USA has proven competitive trade advantages.

In other words, what are the product categories for which U.S. exports minus foreign imports are the greatest? The resulting amounts are known as net exports.

Top 10 Export Sales Opportunities

Below are the top 10 product categories for which the U.S. sold more exports than American importers bought in 2009. Product categories are based on the first 2 digits of the harmonized tariff system (HTS) code. Those 2 digits represent 1 of 97 chapters in the customs tariff schedule; additional chapters 98 and 99 are for special exceptions including returned goods.

 

  1. Aircraft (chapter 88) … US$64.6 billion US trade surplus, up 15.2% from 2008
  2. Oil seeds (12) … $17.9 billion, up 4.7%
  3. Cereals (10) … $15.4 billion, down 39.8%
  4. Optical equipment (90) … $15 billion, down 7.9%
  5. Plastics (39)… $14.4 billion, down 16.4%
  6. Miscellaneous chemical products (38) … $10.8 billion, down 19.2%
  7. Meat (02) … $66 billion, down 9.5%
  8. Food residues and waste (23) … $5.9 billion, down 0.1%
  9. Pulpwood (47) … $4.4 billion down 14.3%
  10. Fertilizers (31) … $4.1 billion, down 44.9%.

Among these top 10 profitable product categories, only aircraft and oilseeds posted increased net export sales over 2008.

Aircraft Export Sales Opportunities

Listed below are specific subcategories from HTS chapter 88 for aircraft that showed both profits and profit growth in 2009.

  1. Aircraft and spacecraft including parts (8800) … US$74.7 billion US trade surplus*
  2. Aircraft launching, landing gear and trainers (8805) … $253.1 million, up 9.8%
  3. Parachutes and rotochutes (8804) …. $39.2 million, up 74.7%.

*new subcategory reported as nil in 2008

Oil Seeds Export Sales Opportunities

The other top HTS subcategory topping the 2009 charts for U.S. competitive trade advantages and export sales opportunities is oil seeds.

  1. Soybeans (1201) … US$16.3 billion US trade surplus, up 5.9% from 2008
  2. Forage products including alfalfa, hay and clover (1214) … $819.9 million, up 27.1%.
  3. Oil seed flours and meals (1208) … $501.6 million, down 15.4%
  4. Sowing seeds, fruits and spores (1209) … $422.2 million, down 0.7%
  5. Sunflower seeds (1206) … $238.1 million, up 26.7%
  6. Unroasted peanuts (1202) … $201.3 million, down 12.4%
  7. Fresh or dried hop cones (1210) … $39.6 million, up 94.2%
  8. Unprepared cereal straw and husks (1213) … $11.6 million, down 28.9%
  9. Copra dried coconut meat (1203) … $1.3 million, up from a 2008 deficit.

Entrepreneurs should not overlook export sales opportunities in areas where the US maintains global competitive advantages.

Spacecraft, soybeans, hay and sunflower seeds are just 4 examples where made-in-USA products are still world-leading trade exports.

Step-by-Step Guide to Establishing Import Export Business - Part 1

Start An Import Export Business

Step-by-Step Guide to Establishing Import Export Business - Part 1

If you want to start an import export business, there is no better way than to franchise. Franchising allows one to begin from a platform of tested, professional expertise, rather than having to build a business from scratch. It’s a great way to feel supported as you begin your home based venture, instead of feeling overwhelmed.

Start an Import Export Business

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Most homes these days have telephones, fax machines, and personal computers. This means that the average home office is as wired as a corporate office. These days, it’s very possible to run a successful home based business from a personal computer, especially in the world of import export wholesale merchandise.

Everyone wants to be their own boss, and make their own hours. There are innumerable opportunities to do this in import export wholesale merchandising. People will always need goods, from clothes to sporting goods to aircraft parts, and the world of commerce will always provide thriving business.

Learn To Import Export

Franchising is a great way to learn to import export and to start a home based business. With franchising, you can be your own boss and start your own business, while building upon methods that are already tested for success. Beginning from a winning platform is a strong way to learn to import export, and to step into the world of international merchandise.

The global marketplace consists of buyers and sellers of wholesale merchandise all over the world; merchants who need to be connected to each other to create successful transactions. There is every reason to start a home based business getting these merchants together. You don't even need to handle the merchandise; it's shipped directly from the warehouse to the buyer.

Learn to Import Export

With franchising, you can learn to import export quickly and easily. You will be supported as you make your transition into a home based business. You can finally be your own boss and create your own flexible hours; these work from home opportunities mean that your job can work for you, rather than the other way around.

Most people have the enthusiasm and intelligence to learn to import export, and the tools needed to start a viable home based business. All you need is a personal computer, phone, and fax machine, and you can begin your venture into the world of home based business. You can be the boss and learn to import export; it's a unique opportunity to explore your business potential.

Top 10 US Export Trade Surpluses by Country 2009

In his March 11, 2010 State of the Union Address, President Obama announced National Export Initiative goals to double U.S. exports and create 2 million jobs over the next 5 years.

During 2009, America’s recovery in international trade had already gained traction.

The U.S. trade deficit fell 37.4% to US$500.9 million from $800 million in 2008. America also generated trade surpluses with 142 of the 233 countries and territories that exchange exported and imported goods with the U.S. in 2009.

Top 10 U.S. Trade Surplus Amounts by Country

Listed below are the top 10 U.S. trade surplus amounts by trade partner country in 2009.

  1. Hong Kong … US$17.6 billion American trade surplus (up 15.9% from 2008)
  2. Netherlands … $16.2 billion (down 14.9%)
  3. Australia … $11.6 billion (down 2.5%)
  4. United Arab Emirates … $10.6 billion (down 26.6%)
  5. Belgium … $7.8 billion (down 32.7%)
  6. Singapore … $6.6 billion (down 48.8%)
  7. Brazil … $6.1 billion (up 148.9%)
  8. Panama … $4.1 billion (down 10.6%)
  9. Turkey … $3.43 billion (down 40.9%)
  10. Chile … $3.41 billion (down 12.5%).

Hong Kong imports were responsible for America’s largest trade surplus amount last year. Hong Kong imports of American aircraft and spacecraft, diamonds and computer processors contributed the most to America’s trade surplus.

Netherland’s top 3 imports that boosted U.S. trade profits the most were petroleum oils, medications as well as American aerospace products.

U.S. exports of aircraft and spacecraft resulted in a $1.5 billion trade surplus with Australia, followed by American gold shipments to the Land Down Under at $878 million.

United Arab Emirates paid $3.1 billion towards the U.S. trade surplus through imported aircraft and spacecraft purchases. The U.S. also had net sales for passenger vehicles to the UAE of $448.7 million.

Top 10 U.S. Fastest-Growing Trade Surplus Amounts by Country

Smaller trading partners dominate the list of top 10 fastest-growing contributors to America’s bottom line in international trade.

  1. Mayotte … US$1.1 million American trade surplus (up 2,602.2% from 2008)
  2. Heard Island and McDonald Islands … $7.1 million (up 2,282.7%)
  3. Marshall Islands …. $63.9 million (up 992%)
  4. Mongolia … $25.7 million (up 475%)
  5. Afghanistan … $1.4 billion (up 251.5%)
  6. Kenya … $373.8 million (185.7%)
  7. Niue … $1.2 million (up 173.8%)
  8. Brazil … $6.1 billion (up 148.9%)
  9. Uganda … $88.2 million (up 146.2%)
  10. Peru … $733.1 million (up 123.6%).

The tiny French island of Mayotte located between Mozambique and Madagascar had the greatest percentage gain in adding to America’s trade surplus by country. Leading the most profitable U.S. exports to Mayotte were paper, women’s cotton trousers and cotton seeds.

Described in the CIA World Factbook as Australia’s uninhabited and sub-Arctic islands, Heard Island and McDonald Islands racked up $6.5 million in charges for imported optical media from the U.S.

Previously owned by the U.S. and located between Hawaii and Australia, Marshall Islands imported $43.9 million worth of made-in-USA aircraft and spacecraft in 2009. Imported modems, switches, routers and similar communication equipment also posted major gains. Some areas in the Marshall Islands are used for U.S. missile tests.

Among better-known importing countries, Afghanistan importers were major buyers of American-made special purpose vehicles, larger passenger cars and parts for airplanes and helicopters.

Brazil is the most heavily populated country on either of the above lists. Top U.S. exports to Brazil that account for the greatest trade surplus contributions include American aerospace products, coal and computer parts and accessories.

Meeting National Export Initiative Goals by Country

From the world’s fifth-largest country Brazil (population 198.7 million) to uninhabited sub-Arctic territories, the U.S. made major gains in establishing trade balances in 2009.

The U.S. has established competitive advantages and demand for its exported products. American exporters are set to improve their trade balance report cards in 2010 as the global economy continues to improve.