Monday, May 27, 2024

Small business exporters fuel jobs, growth in America’s heartland

by BIZ Magazine

Thaddeus Swanek, U.S. Chamber of Commerce

All across America, small and medium-sized exporters are flourishing, selling their products to international customers, gaining market share—and creating jobs.

“The market that exists outside the U.S. is substantial. Any company in the Midwest or the U.S. can minimize their risk by casting their customer net as wide as possible,” says Tom Dustman, international sales director at Sunnen, a manufacturer based in St. Louis, Missouri. “In today’s world, we can ship by air to Chicago, or we can ship by rail to a port on either coast and then load it onto a vessel.”

As America celebrates World Trade Week, it’s worthwhile asking local business leaders what they think about trade and it quickly becomes clear: They all support a bold American trade agenda.

“I know a lot of people will say, ‘Oh, you’re going to lose jobs. You’re going to lose companies. You’re going to lose this, you’re going to lose that.’ I don’t think so,” says Jonathan Szucs, president of Advanced Superabrasives, Inc. based in Mars Hill, North Carolina. “What makes American products and services different is our creativity, our ingenuity, our ability to produce efficiently and effectively… So, I welcome competing against foreign competitors, whether they’re in Europe, Asia, or South America.”

Szucs adds that every day he sees neighboring small businesses in the mountains of western North Carolina selling kayaks, mountain bikes, and outdoor gear around the world.

While many envision big businesses as the ones most involved in international trade, it’s in fact the opposite: Small businesses represent 97% of all exporters and 33% of known export value ($413.3 billion). For example, Szucs estimates that about 20% of his company’s annual revenue comes from international customers.

Another proponent of seizing trade opportunities is Bill Palmer, compliance officer in Rosenbauer America, which manufactures fire-fighting trucks and similar vehicles in South Dakota, Minnesota, and Nebraska.

Palmer says that without the U.S.-Mexico-Canada Agreement, which entered into force in 2020, his firm would face a 6.5% duty on every truck they shipped to Canada. With the cost of their vehicles ranging from about $250,000-$2 million that tariff would have made exports to Canada virtually impossible.  

“That 6.5% would throw us completely out of competition with the Canadian manufacturers,” Palmer says.

USMCA’s impact on other small and medium-sized exporters has been similar. Szucs says that after passage of USMCA, his company did more in exports in one year (2021), than the last 15 years combined. As a result of this success, his company opened new sales offices in both Canada and Mexico to grow its business abroad.

“USMCA lowered a lot of barriers…In Canada we’ve seen about a 25% increase in revenue since USMCA was implemented,” Szucs says.

Palmer says that small exporters located anywhere in the U.S. can benefit from exporting—and if they’re not seeking out international customers—they’re missing out. 

“It doesn’t matter where you’re located in United States, especially with today’s technology. Having the option to export is very huge for anybody in the U.S,” Palmer says.

One things Szucs wish policymakers in Washington were more aware of is the vital importance of an appropriately funded and staffed U.S. Department of Commerce.

“I wish that members of Congress would understand is that the U.S. Department of Commerce is an extension of our sales team,” Szucs said. “Without their Commercial Service group and international trade specialists, we wouldn’t be as big an exporter as we are.”

Dustman says that about 45% of his company’s total sales are from international customers and that there’s ongoing demand for “Made in America” products worldwide.

“The reliability and quality of American-made products is desired by the international marketplace in general,” Dustman says. “International trade—and free trade—are extremely important for the strength of the U.S. economy, for the employment of our population, and for the benefit of the global marketplace.”

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