A Background of US Trade Compared to Our GDP
Here we will compare the trade in exports and imports for the US compared to the entire GDP of the US. Since Trump is committed to renegotiating trade pacts or avoiding them with our leading trade partners, it is important to see how much of US production and therefore jobs can be disrupted as the negotiations go on, and with their results.
We will start with the World’s GDP and that of the leading countries or the EU. The GDP are presented in both dollars and in PPP or Purchasing Power Parity. The numbers are in billions of dollars and rounded off.
World: GDP $73,200
US: GDP $17,900 PPP 17,900 by definition
EU: GDP $17,000 a mix
China: GDP $11,000 PPP 19,400
Now we present the US exports and imports of goods only for 2014 from Wikipedia, in billions of dollars.
We start with the total US exports and imports from the world, then add the EU and leading countries:
Country Exports Imports
World 1,621 2,348 Balance: -727
EU 276 418
Canada 312 348
China 124 467
Mexico 240 294
Japan 67 134
Germany 49 123
US exports are 9.05% of our GDP. US imports are 13.1% of our GDP. If we start tariff wars, the public will get upset with price rises on an eighth of our cheap imported goods. Roughly 9% of our companies and workers will be upset because they will lose out in exports compared to other countries who are accustomed to free trade.
This is part of the basic tradeoff of free trade. We get cheaper goods which are imported from other countries with still cheap labor as they start on the road to become industrialized. We also lose some of the tedious jobs to them such as the garment industry, or soldering our iPads. On the other hand, we also lose more highly paid technical jobs. We have to improve the training of our population for more technical jobs in order to keep our wage advantage. Some workers are disadvantaged by free trade, while the majority of consumers are advantaged by free trade.
This trade off (yes a pun) was voted on by Great Britain (BRexit) and the US (TRump), and both election results were surprising, and very close. There is no clear signal in either case, but both will be acted upon as if there were, to erect free trade and immigration barriers.
From the view of our three largest trade partners, how much of their exports go to the US, and how much of their imports come from the US:
Country: their Exports to the US; their Imports from the US;
Mexico 80.2% 48.8%
Canada 76.8% 54.5%
China 16.9% small
Obviously, the large dependence of Mexico and Canada on their US exports gives us bargaining leverage. We have much less leverage with China.
Since we are embedded for life in California, and California is said to be the world’s sixth largest economy, if we were a country, we show our exports and imports. California’s population at 37 million is about 12% of the US population. California exports $165 billion or 11% of the US exports, and imports $408 billion, or 18.3% of US imports.
California Exports to and Imports from in billions of dollars in 2015:
China 14 143
Mexico 27 45
Japan 12 38
Canada 17 28
