The Trade Numerologist: West Virginia is number one

A big part of the Trump argument in the 2016 election was that his administration would help US companies “win” again in global trade, by protecting US markets with tariffs, and by negotiating new treaties that open up foreign nations to more US exports. Full customs reports aren’t available yet for 2017, but an analysis of data available from IHS’ Global Trade Atlas shows that US exports increased 6.1% to $1.28 trillion during the first 10 months of 2017.

Total US exports, Jan.-Oct., 2012-2017

Unfortunately, that didn’t make much of a dent in the US’s trade imbalance with the rest of the word. U.S imports increased 6.8% to $1.93 trillion, pushing the nation’s trade deficit over that time up 8% to $660 billion. The US is still a country that takes way more than it makes, borrowing a lot of money to do it. And with some exceptions, it’s unlikely that any policies enacted by the new administration could trigger such an immediate difference, but looking at the number makes for an illustrative thought experiment about the current state of the US economy, and which regions are benefitting most from current trade arrangements. On paper, it must be noted, Trump country is doing well. Of the 20 states registering the highest increase in export growth in 2017, only five (Hawaii, Nevada, New Hampshire, New Jersey and Illinois), or 25%, voted for Clinton, a smaller percentage than the 40% of US states she won.

Fastest growing exporters by state, Jan.-Oct. 2017

The reasons for the increases varied by state. In Hawaii, it was aircraft parts; in Nevada, gold; in New Hampshire, electrical equipment. And in West Virginia, of course, it was coal. Even though seams of the black rock are thinning out, and it’s getting more expensive to mine in Appalachia, it’s still a vibrant business, especially compared to the rest of the state’s economic output. West Virginia led all 50 states in export growth over the first 10 months of 2017, and it was thanks to coal exports. But, to be sure, the coal export numbers in 2017 were not higher than the best years under Obama.

West Virginia coal exports, Jan.-Oct., 2007-2017

The coal export boom can be attributed to a recovery in prices on global markets from low 2016 levels, and a demand for the kind of metallurgical coal needed to make steel, which is rare throughout the world but available in West Virginia. The biggest buyers of US coal are the Netherlands, South Korea, India, Japan and Brazil.

Another place that relies on energy exports is Texas. But its overall portfolio is varied, and includes cotton, vegetables and flowers, and it’s benefitted from the proximity of Mexico, and terms afforded under the North American Free Trade Argument.

Texas fastest-growing export categories, Jan.-Oct., 2017

The biggest buyers of US cotton around the world are Vietnam, China, Turkey, Mexico and Honduras.

But the biggest category of growth for the US remains energy. Coal and gas are now the US’s third biggest export category, and fastest-growing export. Overall US energy exports increased 47% to $111.1 billion during the first 10 months of 2017.

Top buyers of US energy exports, Jan.-Oct. 2017

The big increase in fuel shipments to China was driven by an almost-twentyfold increase in oil exports, which increased to $3.4 billion from $162.9 million over the first ten months of 2017.

As the US continues to frack gas out of them hills, and invest hundred of billions of dollars in new gas terminals along coastal and port areas, shipping and logistics companies can bank on the US building on its nascent status as an energy export superpower.