'Made in the USA' Is Back

The age when everything was “Made in China” seems to be well and truly over. Cars, clothing, machine tools and other cosmetics “Made in the USA” are back, amid a new export revival unheard of since the golden age of the 1960s.

The main factor in this rebirth of the manufacturing industry across the Atlantic is the tolerant, even lax, oil and gas exploration policies orchestrated by Barack Obama’s government, which have opened the door to the unprecedented production of hydrocarbons, led by the gas and shale oil boom.

The result: Thanks to sustainably low prices, American oil, gas and indeed coal are flooding the national market, exporting well and generating good revenue, to the extent that the trade deficit of the United States is being considerably reduced. According to a study published on Aug. 18 by the Financial Times, the export goods sector is the sector that has increased the most in value since the arrival of Barack Obama to the White House. According to the foreign trade figures for June, published at the beginning of August by the Department of Commerce, the trade deficit shrank by more than 22 percent compared to the previous month, and the oil deficit is at its lowest in four years. Two elements, positive and negative, explain this figure: the domestic demand, which remains a little low, and less dependence on imports. These two factors have made it possible to largely offset the persistence of expensive oil since the beginning of the Arab Spring and should slightly boost growth in the second quarter.

According to a report from the Boston Consulting Group published Tuesday, Aug. 20, the development of hydraulic fracturing — “fracking” — technologies is playing a major role in the rise of gas and shale oil production, which has increased tenfold in ten years. And all reserves have not been found yet — far from it. The most recent estimates suggest a potential for gas four times higher than that of Western Europe’s.

The report underlines why this hydrocarbon godsend, combined with the production of abundant and efficient electricity, is the reason why the United States is once again one of the world’s leading manufacturing industries. Added to a flexible and inexpensive labor market, these factors have considerably increased the productivity of American workers, which was well below that of Europe only 10 years ago.

The impact on American exports should be increasingly noticeable, the BCG report points out. Excluding foodstuffs, [manufacturing] accounts for 10 percent of the U.S. gross domestic product today, the highest percentage in 50 years. And, once again, this share could continue to increase, especially if the “Made in America” rivals do not become more competitive too.