Economist Alan Beaulieu to Speak Again at SMU Steel Summit

No doubt, foreign trade and the Trump administration’s renegotiation of the North American Free Trade Agreement will be a hot topic. “We can ill afford to alienate our North American trading partners given their importance to our domestic economy via exports,” Beaulieu says. “This is why we do not believe there will be major injurious changes to NAFTA; doing so would be illogical. We also cannot afford to alienate Europe as a trading partner. We will have to adjust our forecasts if there are major changes in our trade agreements with these regions.”

Many underestimate the importance of exports to U.S. economic growth, Beaulieu says. Exports of goods and services for the 12 months ending September 2017 accounted for 11.8 percent of GDP or $2.295 trillion in nominal dollars. “Most people seem to think we are a minor exporter compared to China and other countries. The reality is that we are the second largest exporter of goods and services in the world measured in U.S. dollars. We sell capital goods like aircraft, automobiles and machinery to a host of nations. Thanks to fracking, we now export oil, too.”

Three factors support exports through at least the near term, Beaulieu says: For one, the U.S. makes goods other nations want to buy. “There is a plethora of auto manufacturers around the world, yet cars made in the U.S. are in demand elsewhere” Two, economies of Europe, Canada, Mexico and China are expanding, which makes it possible for others to buy U.S. goods and services. And third, the [weakening] value of the U.S. dollar is favorable for exports through at least the near term.

“Do not buy into the myth that the U.S. cannot compete globally, and that we do not sell goods to other countries. It is simply not true,” Beaulieu says. “Instead, we encourage you to strategize on how to do business with the companies that make these exported products or become an exporter yourself.”