Import and export markets have both been affected by the economic tumult of 2020, but both sides of this industry have fared very differently. Imports and exports alike were initially hit hard in the early part of the year as the global pandemic crushed economies, but imports have shown far more robust growth.
The trade deficit balance between imports and exports continues growing despite the harsh tariffs placed on Chinese imports. American consumers rebounded quickly with retail, likely because with a dearth of service industries- restaurants, bars, concerts, and the like- many consumers had extra money to spend on consumables that are often manufactured overseas.
Exports have seen a drop, however. Not all of it is recession-related, though: Boeing, which accounts for a significant amount of US exports, has seen their orders dry up following problems with their primary passenger jets in 2019. But global demand reduction in products made in the USA has seen the overall amount of US exports decline in 2020.
However, there are a few bright spots in the export world, with a few industries rebounding strong. US chipmakers for high tech silicon have remained a global force, with this sector remaining one of the largest for US manufacturers. Agricultural exports, long a mainstay of the US economy, have begun to tick up as well after some reduction.
In addition, the US Government is working to incentivize exporters through a few programs. The Small Business Administration is implementing a $19 million program to provide nationwide grants to small businesses, a group that has been hit especially hard by the recent downturns. The USDA is partnering with the Export-Import Bank to identify better opportunities for US farmers to penetrate overseas markets and increase the number of agricultural commodities sent outside the USA.
With the 301 duties on imports from China being eligible for drawback refunds, duty drawback remains the oldest and best incentive program for US exporters to continue sending more products to foreign markets. All imported and duty paid products sold abroad, whether unused or manufactured in the USA, are eligible to have their duties refunded via duty drawback.
JM Rodgers has been a leader in duty drawback for more than 60 years and can help anyone determine what kind of refunds they would be due back. If you’d like to discuss your company’s potential to reduce costs via drawback refunds, please contact us at www.jmrodgers.com.
James Rodgers CEO