President Obama's National Export Initiative aims to double exports by 2015 to $3.5 trillion based on the idea that every $1 billion in exports supports 6,000 jobs. The U.S. Department of Commerce estimates that at the current annual 16% growth rate, we are on track to hit that mark. Many factors have aided this achievement. The Export-Import Bank, which provides direct trade loans and guarantees, as well as insurance to businesses that export, recently increased its lending cap by 40% to $140 billion. Looking ahead, the President hopes to make progress on free-trade deals passed under the George W. Bush administration; the Trans-Pacific Partnership and WTO negotiations; and increased protection of intellectual property. He has also announced plans to eliminate tax loopholes and pose an immediate tax on profits by U.S. companies overseas.
To expand trade opportunities for U.S. firms, Romney also wants to pursue new free trade agreements with nations committed to free enterprise and open markets. But he supports unilateral and multilateral punitive measures to deter unfair practices by China, including undervaluing the yuan to make exports cheaper. He envisions a territorial tax system, which would overturn the current system that requires U.S. businesses to pay income taxes, regardless of where revenues are generated. His goal: to encourage domestic investment of foreign profits and make U.S. companies more competitive in the world market.
Reality Check: Most U.S. exporters are small to midsize businesses (with up to 500 employees), not Fortune 500 companies. These enterprises account for about 97% of all exporters and importers, the International Trade Administration reports. Despite the nation's gains, many small business owners face stiff tariffs overseas. They would like to see a more level playing field, especially in China, which is the third largest export market for small and midsize companies.
From home improvement stores to insurance short-sellers, some parts of the economy are seeing a bump from Sandy's punch.