United States no longer the world’s consumer
Over the past decade we have witnessed a fundamental change in the world economic order, particularly when we consider trade between the US and the rest of the world. Developed markets like Japan and Italy are approaching peak consumption, with stable or declining populations, while China still manufactures more goods than its domestic economy can absorb.
The United States used to depend on imports, but now, excluding Canada and Mexico, imports from the rest of the world account for only 4% of GDP. And exports of food, oil, gas, and manufactured goods have shot up.
‘Made in the USA’ is once again a cool label on anything from truck tires to machine tools to kids’ toys, and North America is mostly self-sufficient. The old adage that stuff was designed in Ireland, made in China, and bought by Americans no longer holds. Exponential increases in shipping costs and the need for resilient supply chains have changed the game.
In the past decade, American technology innovation has blossomed on many fronts, including space travel, microchip fabrication and synthetic food production. Together with advances in artificial intelligence and smart infrastructure – the internet of everything – and a growing, educated workforce, the domestic economy is roaring along. The almighty dollar is as strong as ever.
So, while the US has withdrawn from active participation in many theatres and spheres of influence, its technological and economic success remains the envy of the rest of the world. America just doesn’t need them so much, and global businesses that thrived on US consumer demand have to reinvent themselves.
Warning: Hazardous thinking at work
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