US Exports Gain as Dollar Decreases
Although the relative value of the US dollar is decreasing, there are some upsides- US products are more competitive when exported.
According to “In Dollar’s Fall, Upside for U.S. Exports” from the New York Times, US exporters are increasing their sales by going overseas, in particular to Europe, to aid in their recovery after a dismal 2008. Manufacturing in the US is looking appealing to European companies due to the decreasing dollar as well, with EU corporations looking to source from the US or give preference to more competitive plants operating in the US.
One US exporter, Robert Stevenson of Buffalo, NY, hopes to sign a multimillion dollar deal to a European buyer which could lead to his company re-hiring those employees he was forced to lay off last year.
Mr. Stevenson’s family-owned company, Eastman Machine, has been making cutting tools for the textile industry for 120 years. A year ago, in the depths of the financial crisis, Mr. Stevenson had to lay off a dozen workers, but the dollar’s almost 20 percent decline since March has made his goods much more competitive overseas. Next month, Mr. Stevenson hopes to sign a multimillion-dollar deal in Europe that could enable him to rehire his workers.
“This wouldn’t have happened five years ago, or even two years ago,” he said. “Business conditions are still slow but the dollar has allowed us to be much more aggressive overseas.”
The story of Eastman Machine is a small echo of the larger shifts accompanying the dollar’s fastest drop in six years; last week the dollar neared $1.50 against the euro, compared with $1.25 in March. The weakness of the dollar, if sustained, could force American consumers to get used to paying more for many imported goods as well as trips to their favorite vacation spots.
But there is also an upside: a weak dollar could prove beneficial to the American economy by aiding long-suffering manufacturers, rebuilding a stronger industrial base and lifting exports even if it makes life harder for trading partners around the world, especially in Europe.
Read more of this feature article in the New York Times, including discussion on the weakening dollar’s effect on jobs and trade tensions: In Dollar’s Fall, Upside for U.S. Exports
Introduction to Automating Export Compliance
With American manufacturers becoming more competitive in Europe, simply shipping your goods to the EU will not suffice. Exporters face fines, delays, and penalties if they are not compliant with US and EU Customs requirements – so exporters must have a system in place to ensure trade compliance.
According to research by the AberdeenGroup, companies using an automated export compliance system are 1.5 times more likely to report 0% of exports held up at customs. This video highlights how applying an export management system can ease your export pains and help establish compliance to avoid penalties, delays and fines. Watch it online now!
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