The US’ export power - July 01, 2018
Donald Trump is often unsatisfied with the magnitude of American trading, saying his country is in serious trade deficit. But is the US really in such a bad place right now? Data paints a different image: The States is the world’s second greatest exporter and biggest economy.
After the American president’s continuous remarks about the country’s trade deficits HowMuch.net investigated the problem. As they wrote, “Trump’s rhetoric […] got us thinking about how the U.S. actually compares as an exporter in the world economy, so we create our newest map”.
What do the numbers tell?
The map created by HowMuch.net is based on the Data of the World Trade Organization and shows the biggest exporters of 2017. No country made it to the list with a sub $20 billion export.
Click on the image to see it in full resolution
Looking at the map it soon becomes obvious that no matter what Trump says, the US is at a rather strong place being second. Only one country beats it, non-surprisingly, China. It’s also clear that the first three countries are really dominating the top list: China, the US and Germany. Their lead is serious since the “top three countries generate more exports than the rest of the top 10 combined ($5,258B vs $3,960B)”.
What’s Trump’s problem?
If the US is still going strong in exports what’s the problem of the President? Well, he says that the country has a trade deficit. According to WTO’s data, that’s true. The country had an export of $1,454 billion against an import of $2,251 billion in 2016. This indeed means that the country buys more than it sells.
But Trump also gives the impression that the US is only importing, while the rest of the world is not buying anything from them. The latter is simply not true. Although China does tightly control what it imports and prefers to use its own products, it still imports from the US. Western countries on the other hand are rather open to US products and do trade with The States. This is why a full-fledged trade war may only hurt the US and not help them on the long-term.
The US is still leading
What’s more, the US is still the world’s biggest economy according to World Bank’s 2017 figures. Alone it accounts for the quarter of the world’s economy, with its $18 trillion production. China follows them with $11 trillion, while Japan comes third with $4.4 trillion.
America’s lead may not remain forever, but the change may not come soon. A study made by PricewaterhouseCooper suggests that China will take over around 2050, the reason being is that emerging economies will grow faster than highly developed ones.
Disclaimer: This analysis is for general information and is not a recommendation to sell or buy any instrument. Since every investment holds some risk, our main business policy is based on diversification to minimize threats and maximize profits. Innovative Securities’ Profit Max has a diversified portfolio, which contains liquid instruments. This way, our clients can maintain liquidity, while achieving their personal investment goals on the long term.