The European nations that first colonized North America used it as a source of commodities and agricultural products. The northern regions shipped furs and dried fish. The middle regions provided corn, deer hides, salted meats, wheat, and flour. The southern regions exported tobacco, rice, sugar (from French Louisiana), and indigo dye. In all three regions, forests were harvested to produce timber planks, masts, boards, staves, and shingles for export. Apart from some processing industries that turned raw materials into products with greater export value, most industries were discouraged by the colonizing nations, which wanted to keep the colonies dependent on the home countries for manufactured goods.
In the English-speaking colonies of North America, some of the more popular imported manufactured goods were clothing, furniture, tools, books, leather goods, and weapons. The colonies also imported sugar and molasses from the Caribbean and slaves from Africa. Although the colonists attempted to be as self-sufficient as possible, they imported more than they exported, so the balance of trade was in England's favor. The Navigation Acts prohibited the colonists from trading directly with other European nations or their colonies.
American independence freed the new nation to trade anywhere in the world. The invention of the cotton gin in 1793, the opening of the Mississippi River to American navigation in 1795, and the development of the fabric industry in New England around that time ramped up American exports. U.S. revenue from exports rose from $33 million to $94 million between 1794 and 1801. By the beginning of the 19th century, if calculated on a per-capita basis, America's exports were twice those of Europe and five times those of the world as a whole.
Over the course of the 19th century, even as the American workforce shifted increasingly from agriculture to manufacturing, the nation's exports continued to be dominated by agricultural products. During this period, America's land under cultivation expanded continuously, especially in the Midwestern breadbasket, while the development of canals and later railroads and steamships reduced the costs of bringing agricultural output to port cities and shipping it to markets in Europe and the West Indies. From the beginning to the end of the century, America's domestic exports (which exclude re-exports) grew from 3.2 percent of world exports to 15 percent. The balance of trade shifted from imports to exports around 1880. Agricultural products averaged 70 percent as a share of the exports over the course of the century. Manufactured goods grew from 4.7 percent of the nation's exports in the first decade to 16.2 percent in the last.
In 1900, America exported $1.4 billion in goods and imported only $850 million. Chief among our exports were iron and steel, accounting for 9 percent of the value, petroleum products (5 percent), copper manufactures (4 percent), leather (2 percent), and cotton manufactures (2 percent).
America's agricultural exports peaked early, remained low for most of the first half-century, and then rose dramatically starting in 1960. Cotton dominated at the beginning of the century but was a minor player at century's end. Wheat and flour also declined, although not as severely as cotton. By 2000, oilseeds and their products were the dominant agricultural exports, followed by grains other than wheat. Another change, happening in the last decade, was from bulk commodities (grains and oilseeds) to processed and value-added agricultural goods. Among agricultural imports, the century saw a shift from rubber, coffee, and sugar to fruits and vegetables.
Petroleum exports rose steadily from 1900, but shortly before the First World War, America's imports of crude began to outweigh exports. The balance tipped back in America's favor from 1933 through the eve of the Second World War. Although we became a net importer when that war ended, this changed in September 2019 when, for the first time since the 1940s, the United States experienced its first full month of positive trade balance.
The U.S. became a consistent net exporter of manufactured goods for many decades following 1910, thanks to a surge in exports of iron and steel beginning two decades earlier. As a percentage of exports, manufactured goods fluctuated between 30 and 40 percent of total exports for most of the 20th century, dipping to a low point in the early 1950s but climbing again beginning with the 1960s. Manufactured goods now make up 56 percent of our total exports, but the balance of trade in these goods has shifted and now amounts to a deficit of more than one-half trillion dollars each year.
In recent decades, agricultural and service exports have helped our overall balance of trade, but not enough to overcome heavy negative balances in categories such as manufactured goods. We have not seen an overall balance of trade in America's favor over the last three decades. In 1960, just 8 percent of American purchases were imports. By the 2010s, this figure had increased to nearly 60 percent. A 2019 report from the Federal Reserve Bank of San Francisco estimated that "more than 10 cents of every dollar consumers spend reflects the cost of imports at various stages of production."