It helps to put the current trading environment in context. Over time, international trade positions have changed significantly. In the 1950s, 25 percent of the total world exports came from the U.S., in large part because the U.S. economy was not destroyed by World War II. It had the manufacturing power and products to sell elsewhere while many European economies did not. Later, as other trade partners worked aggressively to secure a larger world market share for themselves, U.S. export growth didn’t keep pace with the total world export growth. By 2008, that 1950s share of 25 percent had dropped to 8 percent, with both Germany and China having a higher share in world merchandise exports than the U.S.
Ironically, it was the leadership role of the U.S. after World War II that led to the shift in trade positions. American policymakers have long seen the U.S. as the leading country in world power and trade. This opinion brought with it a sense of obligation to assist other countries with their trade efforts. Americans believed that without their help, other countries would never play a meaningful role in the global economy. While there was continuing aid to other countries and their businesses, U.S. domestic firms received no special support or aid. These policies continued for decades, eventually placing U.S. companies at a distinct disadvantage in the world trading environment.
At the same time, U.S. companies were continually assured that the American domestic market was large enough to support the nation’s businesses. That market availability and the relative distance to overseas markets led U.S. manufacturers to remain content to keep their trade within domestic borders. The perception was that exporting and international marketing were not worth the risk and effort.
Meanwhile, as smaller nations were forced to look beyond their borders to grow and thrive, their companies trained executives about markets abroad and cultural sensitivities and differences. U.S. managers didn’t learn this on the job and students didn’t learn about it in business schools. They lacked global interest, information, and education. This, combined with an overall ignorance of where and how to market internationally and unfamiliarity with global market conditions and trade regulations, nearly ensured that the U.S. would continue to lose its share of the international market.
Recently this all has changed. As readers, do you think we will see another fundamental shift in trade paradigms in the years to come?
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