February 13, 2017
By: Tony Bertuca
In an oblique appeal to the Trump administration, the Aerospace Industries Association is touting a “record trade surplus of $90 billion in 2016” and continued support of the U.S. manufacturing sector.
The new administration has signaled interest in the defense industrial base’s potential to drive U.S. job growth and has shown antipathy for foreign trade deficits.
“Aerospace and defense exports directly support 1.7 million U.S. jobs in our industry and indirectly support an additional 1.1 million jobs across the broader U.S. economy,” AIA said in a statement accompanying a quarterly report on A&D exports.
“The industry also continued its fifth year of outperforming the national trade average, growing by 2.2 percent year-over-year compared to -3.3 percent for exports of all other U.S. goods,” the industry group added.
While A&D trade is “winning for America, contributing positively to our trade balance and creating high-skill high-paying jobs, competitors are growing their share of the global market far faster,” AIA said.
In December, AIA CEO David Melcher said he was still figuring out how to engage with the Trump administration on behalf of aerospace and defense companies after the then-president-elect used his Twitter account to blast Boeing about the cost of replacing Air Force One.
“This is a relatively new phenomenon,” Melcher said. “I know the right answer is not going to be: Tweet back.”
Instead, Melcher encouraged defense companies to try to understand Trump’s potential policy plans.
“Don’t look at the head or the eye of the person you’re trying to tackle — look at the belt buckle,” he said. “Where the belt buckle goes is where they’re going to go. I think all our companies ought to be looking for the belt buckles and figuring what’s the right way engage this and not overreact to any one particular [instance].”
Now in office, Trump has made clear through his interactions with Lockheed Martin over the F-35 that he prioritizes cutting the cost of weapon programs and boosting U.S. manufacturing.
And AIA in its new report says increasing exports remains a key priority for U.S. aerospace and defense companies.
“Through greater industry-government coordination and trade policies like security cooperation enterprise reform and restoring full functionality to the Export-Import Bank, our industry can increase its potential to create jobs and contribute to America’s economic growth,” the association says.
The Export-Import Bank subsidizes American exporters, but has been partially paralyzed for more than a year by GOP lawmakers who want to shut it down over concerns about crony capitalism. Trump has yet to announce his position on the issue.
Meanwhile, the U.S. defense industry generated $21 billion in foreign exports in 2015, about the same level as the previous year.
Defense companies in 2015 exported $15 billion in military aerospace products, with the aircraft and missile sectors accounting for $3.6 billion and $2.7 billion respectively, according to AIA.
AIA states that military non-aerospace exports totaled $5.6 billion, with $735 million coming from armored vehicles, $1.2 billion from “armored vehicle and weapon parts,” and $1.8 billion from “other equipment and materials.”
The commercial side of the aerospace business far surpassed defense, accounting for $121.7 billion in foreign exports in 2015.