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As expected, this is not due to trade with Mexico increasing, but due to trade with others decreasing. Is it because the US economy is becoming stale or becaus

As expected, this is not due to trade with Mexico increasing, but due to trade with others decreasing. Is it because the US economy is becoming stale or because it is diversifying its trade partners? Also, this is just another sign that the world is indeed shifting to a multipolar order.

FredPret 3y ago
The US (and world) economy has been pumping out geometrically increasing amounts of wealth for centuries now. This is due to frosty relations with China decreasing trade with them.
- deleted 3y ago
  [deleted]
neither_color 3y ago
The US economy is not stale, it is growing faster than Europe. I raise this comparison because the Euro block was the most similar thing to it in terms of development for the past decade. Other emerging economies have been developing faster and their percentage of trade with the US may be decreasing, but I don't see any sign of the US stalling. “In 2008 the EU’s economy was somewhat larger than America’s: $16.2tn versus $14.7tn. By 2022, the US economy had grown to $25tn, whereas the EU and the UK together had only reached $19.8tn. America’s economy is now nearly one-third bigger. It is more than 50 per cent larger than the EU without the UK.” Source: https://www.ft.com/content/80ace07f-3acb-40cb-9960-8bb4a44fd8d9 https://www.ft.com/content/80ace07f-3acb-40cb-9960-8bb4a44fd...
- jltsiren 3y ago
  Comparisons based on nominal exchange rates are misleading, because the rates fluctuate a lot. The 2008 numbers in particular are not based on the strength of the EU economy but on the weakness of the US dollar during the financial crisis. Back then, €1 was worth $1.5 to $1.6 for a while, while the long-term average is closer to $1.2. And right now, the real year-on-year GDP growth rate in the EU is ~10% (when measured in US dollars), because the euro was particularly weak a year ago.
  - JumpCrisscross 3y ago
    > right now, the real year-on-year GDP growth rate in the EU is ~10% (when measured in US dollars) I'm seeing this figure for '21 [1]. Not "right now." [1] https://www.macrotrends.net/countries/EUU/european-union/gdp-gross-domestic-product#:~:text=European%20Union%20gdp%20for%202021,a%201.8%25%20decline%20from%202018 https://www.macrotrends.net/countries/EUU/european-union/gdp....
    - jltsiren 3y ago
      The projected real GDP growth rate for the EU in 2023 is 1.0%, when measured in euros. Right now, €1 is about $1.1, while it was around $1.0 a year ago.
      - JumpCrisscross 3y ago
        > projected real GDP growth rate for the EU in 2023 is 1.0%, when measured in euros. Right now, €1 is about $1.1, while it was around $1.0 a year ago. Ah, I see the problem. 1% real GDP growth means €1 becomes €1.01. If, in the same time, €1 went from buying $1 to buying $1.1, then you--round trip--went from having €1 that buys $1 to €1.01 that buys $1.11. But! That $1 doesn't buy today what it bought one year ago. (The precise point of fudgery is when I say "€1 went from buying $1 to buying $1.1." We went from one 2022 € buying one 2022 $ to one 2023 € buying one 2023 $. We deflated the euro GDP but not the exchange rate.) TL; DR The EU is not experiencing double-digit real growth in dollar terms.
        jltsiren 3y ago
        That 1% already the real GDP growth rate. Nominal growth is more like 6-7%, as inflation is a bit higher in the EU than in the US.
        JumpCrisscross 3y ago
        > 1% already the real GDP growth rate In Euros. The dollar was also losing real value in that time. You can't compare a real figure from one time period with nominal figures from another without doing some adjusting. (You're describing, in essence, a carry trade.)
JumpCrisscross 3y ago
> this is not due to trade with Mexico increasing, but due to trade with others decreasing We traded more with Mexico in 2022 than ever before, and are on track to beat that in 2023 [1]. Trade with Mexico is increasing. It's just not doing so as dramatically as China's trade with America is decreasing. [1] https://www.census.gov/foreign-trade/balance/c2010.html https://www.census.gov/foreign-trade/balance/c2010.html
- moralestapia 3y ago
  Thanks for adding more context around this!
mattbrewsbytes 3y ago
There are countries, like China, who are in a period of population decline. If you have less people YoY and your population is weighted towards retirement age it can spiral to where the entities producing things produce less each year and foreign businesses/countries buying those things will find them elsewhere. Mexico's population is growing, younger and much closer for trade and friendlier to the US. Its almost inevitable that the trade relationship strengthens amongst Mexico, US and Canada. If you were playing the game Civilization, North America is more self-sustainable than other continents as far as access to materials, food, water, etc. goes. Easier to defend as well with friendly neighbors. Countries with population decline (Russia is in this boat as well and then throwing their young males into war which might compound population decline) can't reverse that very quickly - there are "boomer" populations all over the globe at various stages entering retirement age (i.e. not working and not spending) with younger generations being much smaller in size. I think the pandemic threw a brick on the accelerator for shaking up trade relationships when people realized how just-in-time doesn't work well when things get disrupted.

FredPret 3y ago

The US (and world) economy has been pumping out geometrically increasing amounts of wealth for centuries now. This is due to frosty relations with China decreasing trade with them.

deleted 3y ago
[deleted]

neither_color 3y ago

The US economy is not stale, it is growing faster than Europe. I raise this comparison because the Euro block was the most similar thing to it in terms of development for the past decade. Other emerging economies have been developing faster and their percentage of trade with the US may be decreasing, but I don't see any sign of the US stalling. “In 2008 the EU’s economy was somewhat larger than America’s: $16.2tn versus $14.7tn. By 2022, the US economy had grown to $25tn, whereas the EU and the UK together had only reached $19.8tn. America’s economy is now nearly one-third bigger. It is more than 50 per cent larger than the EU without the UK.” Source: https://www.ft.com/content/80ace07f-3acb-40cb-9960-8bb4a44fd8d9 https://www.ft.com/content/80ace07f-3acb-40cb-9960-8bb4a44fd...

jltsiren 3y ago
Comparisons based on nominal exchange rates are misleading, because the rates fluctuate a lot. The 2008 numbers in particular are not based on the strength of the EU economy but on the weakness of the US dollar during the financial crisis. Back then, €1 was worth $1.5 to $1.6 for a while, while the long-term average is closer to $1.2. And right now, the real year-on-year GDP growth rate in the EU is ~10% (when measured in US dollars), because the euro was particularly weak a year ago.
- JumpCrisscross 3y ago
  > right now, the real year-on-year GDP growth rate in the EU is ~10% (when measured in US dollars) I'm seeing this figure for '21 [1]. Not "right now." [1] https://www.macrotrends.net/countries/EUU/european-union/gdp-gross-domestic-product#:~:text=European%20Union%20gdp%20for%202021,a%201.8%25%20decline%20from%202018 https://www.macrotrends.net/countries/EUU/european-union/gdp....
  - jltsiren 3y ago
    The projected real GDP growth rate for the EU in 2023 is 1.0%, when measured in euros. Right now, €1 is about $1.1, while it was around $1.0 a year ago.
    - JumpCrisscross 3y ago
      > projected real GDP growth rate for the EU in 2023 is 1.0%, when measured in euros. Right now, €1 is about $1.1, while it was around $1.0 a year ago. Ah, I see the problem. 1% real GDP growth means €1 becomes €1.01. If, in the same time, €1 went from buying $1 to buying $1.1, then you--round trip--went from having €1 that buys $1 to €1.01 that buys $1.11. But! That $1 doesn't buy today what it bought one year ago. (The precise point of fudgery is when I say "€1 went from buying $1 to buying $1.1." We went from one 2022 € buying one 2022 $ to one 2023 € buying one 2023 $. We deflated the euro GDP but not the exchange rate.) TL; DR The EU is not experiencing double-digit real growth in dollar terms.
      - jltsiren 3y ago
        That 1% already the real GDP growth rate. Nominal growth is more like 6-7%, as inflation is a bit higher in the EU than in the US.
        JumpCrisscross 3y ago
        > 1% already the real GDP growth rate In Euros. The dollar was also losing real value in that time. You can't compare a real figure from one time period with nominal figures from another without doing some adjusting. (You're describing, in essence, a carry trade.)

JumpCrisscross 3y ago

> this is not due to trade with Mexico increasing, but due to trade with others decreasing We traded more with Mexico in 2022 than ever before, and are on track to beat that in 2023 [1]. Trade with Mexico is increasing. It's just not doing so as dramatically as China's trade with America is decreasing. [1] https://www.census.gov/foreign-trade/balance/c2010.html https://www.census.gov/foreign-trade/balance/c2010.html

moralestapia 3y ago
Thanks for adding more context around this!

mattbrewsbytes 3y ago

There are countries, like China, who are in a period of population decline. If you have less people YoY and your population is weighted towards retirement age it can spiral to where the entities producing things produce less each year and foreign businesses/countries buying those things will find them elsewhere. Mexico's population is growing, younger and much closer for trade and friendlier to the US. Its almost inevitable that the trade relationship strengthens amongst Mexico, US and Canada. If you were playing the game Civilization, North America is more self-sustainable than other continents as far as access to materials, food, water, etc. goes. Easier to defend as well with friendly neighbors. Countries with population decline (Russia is in this boat as well and then throwing their young males into war which might compound population decline) can't reverse that very quickly - there are "boomer" populations all over the globe at various stages entering retirement age (i.e. not working and not spending) with younger generations being much smaller in size. I think the pandemic threw a brick on the accelerator for shaking up trade relationships when people realized how just-in-time doesn't work well when things get disrupted.