Is the rest of the world too reliant on US imports?

[ray245]

60 percent of the world's import belongs to the USA. That means almost any nation that is export driven will depend heavily on the United states to function. As we all know, the United states has been spending money beyond their means as a whole.

So should the world as a world be less reliant on the US to support their economy? Also, is it even possible for the rest of the world to be less reliant on US importing their goods?

[TheMuffinKing]

60 percent of the world's import belongs to the USA. That means almost any nation that is export driven will depend heavily on the United states to function. As we all know, the United states has been spending money beyond their means as a whole.

So should the world as a world be less reliant on the US to support their economy? Also, is it even possible for the rest of the world to be less reliant on US importing their goods?

As for the first part of your question, I don't know or have an opinion either way. For the second part, I think it depends on each country. I'm sure it shows that some countries could produce a commodity locally versus trading for it. On the other hand many countries are trading for goods and services that are unavailable or infeasible to produce at home. I know that sounds general, but I'm in the middle of a bowl of Yukejang kimchee noodles.

[Samuel]

It, as always, depends on the goods and how diversified they are. Countries that make only one product, like extraction or cash crops will probably be screwed. Countries that are diversified can probably switch out to sectors that are hurt. The unemployment rate will rise, but they will survive.

[montypython]

One also needs too look at capital investments in the US by other countries in relation to their exports to the US. Take for example Japan, which has about a Trillion US dollars invested in US financial markets, which are used to help make purchases of Japanese made goods. Without those capital investments the amount of imports that the US makes would be much smaller than the actual level of purchases.

[Sea Skimmer]

Many of the nations pumping exports into the US import market are still in fairly early stages of development; they NEED that kind of influx of cash so they can rapidly industrialize. You can’t just find hundreds of billions of dollars worth of trade deficit in your favor just anywhere. China is the prime example, but hardly the only one. In the very long term relying all on exports to the US is a bad idea because of what we are seeing now, but in the short to mid term it really is the best option many states could have taken. I mean sure if they didn’t rely so much on exports to the US they wouldn’t be hurt so much by US trouble, but they also wouldn’t have as much of an economy to have hurt in the first place. In the long run everyone will diversify if they want to or not, because the US economy will represent a smaller and smaller fraction of the total global economy

[Fingolfin_Noldor]

60 percent of the world's import belongs to the USA. That means almost any nation that is export driven will depend heavily on the United states to function. As we all know, the United states has been spending money beyond their means as a whole.

So should the world as a world be less reliant on the US to support their economy?

So to whom would the world sell most of the goods in the world? Africa?

Also, is it even possible for the rest of the world to be less reliant on US importing their goods?

Because most of the world's economies are still in the developing stage, that is an impossibility. Their markets do not have the critical mass to sustain itself, neither do they have to sophistication nor the buying power. China exports more than it imports because more than half the population still lives in the country side in farms with a pittance for an average wage. Simply put, people will sell goods to people who can buy them. Where are these people? In Europe and in the USA.

Even India, for all its protectionism, needs the US more than the US needs them.

[K. A. Pital]

So to whom would the world sell most of the goods in the world? Africa?

Um... sell more to each other?

Their markets do not have the critical mass to sustain itself, neither do they have to sophistication nor the buying power.

Well, that's because they don't have the luxury to get lots of capital due to world inequalities, the capital which is spread between citizens and then creates the so-touted "bying power" in the First World, while simultaneously the assets of First World capitalists are factories where Third World people produce their goods for the First World at a low price.

Perhaps the demise of the US - which is unlikely to be momentarily anyway - would allow other nations, other markets to become more sizeable. China would have to trade a little more with everybody in the world, not just the US.

In the long term, other nations would trade with each other more and become less reliant on the US. It's pretty simple.

Of course, looking in the short term only, the US decreasing imports will lead to pain for exporter nations - but do we really want to be as short-sighted as the ideologues behind the whole US market expansion ideology?

[Guardsman Bass]

So to whom would the world sell most of the goods in the world? Africa?

Um... sell more to each other?

That's already happening - one of the reasons why South America is seriously starting to suffer (other than directly because of US economic weakness) is because the major importer of South American commodities - China - is importing less.

Their markets do not have the critical mass to sustain itself, neither do they have to sophistication nor the buying power.

Well, that's because they don't have the luxury to get lots of capital due to world inequalities, the capital which is spread between citizens and then creates the so-touted "bying power" in the First World, while simultaneously the assets of First World capitalists are factories where Third World people produce their goods for the First World at a low price.

They could also save a very large fraction of their income like a lot of the East Asian countries do, but then you need a not-so-corrupt banking system to deposit it in.

Perhaps the demise of the US - which is unlikely to be momentarily anyway - would allow other nations, other markets to become more sizeable. China would have to trade a little more with everybody in the world, not just the US.

China actually does trade a lot with other countries; they import a lot of natural resources from around the world, plus many other goods particularly from their backyard in East Asia (China is actually the biggest importer of Japan's exports for the first time this year). It only seems like they don't because they export much more than that to the United States market, which gives them a hefty positive balance-of-payments.

In the long term, other nations would trade with each other more and become less reliant on the US. It's pretty simple.

Or China would become the new Giant, pulling in exports from all over the place.

[K. A. Pital]

Or China would become the new Giant, pulling in exports from all over the place.

But how about other nations which will require imports of goods? If we are talking about US economy going into a recession, we should also cosider the US exports falling. Someone will have to make up for it.

So perhaps China would become the biggest importer, but so could the EU IMHO. Don't they import lots of Chinese goods anyway? With the US goods declining, Europe would take in even more imports, and since it's already #2, why not?

But yeah China and EU are both strong competitors for top importer. The EU imports lots, and if you combine the EU with Britain, they will in fact top the US volume of imports even now

[Fingolfin_Noldor]

But how about other nations which will require imports of goods? If we are talking about US economy going into a recession, we should also cosider the US exports falling. Someone will have to make up for it.

So perhaps China would become the biggest importer, but so could the EU IMHO. Don't they import lots of Chinese goods anyway? With the US goods declining, Europe would take in even more imports, and since it's already #2, why not?

But yeah China and EU are both strong competitors for top importer. The EU imports lots, and if you combine the EU with Britain, they will in fact top the US volume of imports even now

Well, the EU going into recession now, and that means they will be buying less as well. I think the issue right now is that most developing nations have positioned themselves as manufacturing powerhouses supplying the West with goods and getting capital inflows into their own countries so that they can use the money to develop themselves. As they scale up the technology ladder, they start importing certain lower tech goods from other poor nations and then the cycle repeats. That has been the model they have followed. Countries that didn't follow it 100% like India tended to lag behind and have a huge lower class. Of course, as with all things, the faster you scale up, the faster it goes plunging down like a brick.

[Guardsman Bass]

But how about other nations which will require imports of goods? If we are talking about US economy going into a recession, we should also cosider the US exports falling. Someone will have to make up for it.

So perhaps China would become the biggest importer, but so could the EU IMHO. Don't they import lots of Chinese goods anyway? With the US goods declining, Europe would take in even more imports, and since it's already #2, why not?

But yeah China and EU are both strong competitors for top importer. The EU imports lots, and if you combine the EU with Britain, they will in fact top the US volume of imports even now

Well, the EU going into recession now, and that means they will be buying less as well. I think the issue right now is that most developing nations have positioned themselves as manufacturing powerhouses supplying the West with goods and getting capital inflows into their own countries so that they can use the money to develop themselves. As they scale up the technology ladder, they start importing certain lower tech goods from other poor nations and then the cycle repeats. That has been the model they have followed. Countries that didn't follow it 100% like India tended to lag behind and have a huge lower class. Of course, as with all things, the faster you scale up, the faster it goes plunging down like a brick.

That's pretty much textbook Export Led Industrialization.

[Fingolfin_Noldor]

That's pretty much textbook Export Led Industrialization.

The really huge flaw in all this is that the countries in question have to balance the demands of foreign companies and their own. Favour too much of the other leads to the lack of development of the other.