Some of the stiffest competition facing U.S. exporters does not come from Europe—or even China—but the U. S. Treasury Department.
Yesterday, the U.S. Bureau of Economic Analysis (BEA) announced that foreign customers spent $1.83 trillion on U.S. goods and services in 2010.
They spent $119 billion on U.S. agricultural exports, $370 billion on machinery and equipment, $112 billion on vehicles and parts, $166 billion on consumer goods like pharmaceuticals and household goods, and $546 billion on services.
The BEA reported that foreigners directly invested $194 billion in the U.S. economy and spent another $117 billion on net purchases of U.S. stocks.
In 2010, foreigners also spent $707 billion on U.S. Treasury bonds and notes to help finance the federal budget deficit. This represents $707 billion that was denied to U.S. exporters and businesses—which are seeking much-needed investment—and spent to finance the federal budget deficit instead.
U.S. businesses should recognize that if they want to increase exports and attract more foreign investment, the federal government is one of their biggest competitors for scarce foreign dollars.