US President Trump often complains about the United States’ high trade deficit. This is also a sign of prosperity. How is the largest economy in the world?
The expectation of economists that the American economy is sometimes suffering from the new US government’s chaotic policy has not yet been broadly fulfilled. The gross domestic product fell by around 0.3 percent in the first quarter. However, the inflation rate is comparatively low – in April it was 2.3 percent – and unemployment is low.
The stock prices also did not develop badly recently. Since many workers build their pension in the USA in the United States, American stock market events play a much larger role for broad circles than is the case in continental Europe.
The trade balance
A thorn in the side is the trade balance for the new American government. The United States exports far fewer (2024: for two trillion euros) than they import (2024: for three trillion euros). New tariffs make imports more expensive and therefore more unattractive. There should therefore be more demand for local products in the country.
A negative trade balance does not necessarily have to be bad for a country. In the USA of the United States, it is also a sign of special prosperity: the American economy has been affecting goods worldwide for decades. In the United States, it is going up economically.
Dynamic US economy
While economic output in Germany fell by 0.2 percent in 2024, it rose by 2.8 percent in the United States. Data from the International Monetary Fund (IMF), which were expected to be expected to have the average dollar course, show: Last year, the gross domestic product in Germany was 4.3 trillion (4,300 billion) euros, which is 52,000 euros per inhabitant. In the United States, it was 28 trillion or 82,000 euros per inhabitant. The American economy is therefore far more productive than the Germans.
International economic relationships are not fully shown in the trade balance. Sales of services are also important in the United States case. The services of Google, Meta, Amazon and Netflix are often paid for worldwide as the American investment banks. Last year, the United States exported services worth the equivalent of one trillion euros and imported for 750 billion.
After all, there are still direct payments between the countries. For example, tourists come to the country, foreign employees send money home and invest companies abroad. All of this is merged into the current account of a country, which is positive for Germany at 250 billion euros and is negative for the United States with a trillion euro.
How do the United States pay its deficit?
In international business, it is no different from in the village shop: one gets money, the other goods and if they cannot take money in their part, it is over.
The dollar has been the worldwide leading currency for 80 years. International trade is billed in dollars, many central banks of small countries control the value of their currency along the dollar. The United States has brought the decades of high demand for dollars into a position of the most popular debtor in the world: For example, the American state can go into fault as cheap as no other country.
But it’s not just about access to debt. A lot is being invested in America. The United States has the reputation of being a solid, stable and reliable market with 340 million inhabitants. Where, if not in America, can security -conscious investors invest money?
The popularity leads to a high value of the dollar compared to other currencies. If the decrease, America would lose significantly attractiveness for foreign investments and as debtor. There is a risk that the United States will lose its international position as a first -class debtor. That would be an indirect consequence of the new economic policy, which the country and its inhabitants would be expensive.
Debt American
According to data from the International Monetary Fund (IMF), the public debt in Germany last year was 62 percent of gross domestic product. In the USA it was twice as high. The new debts that American finance ministers do year after year would immediately cost their German colleagues.
Not only the American state is more generous than that is conceivable in Germany and Europe. Private individuals are also more risk -loving than Europeans, always as a German. They have little reserves and insurance and like to consume a lot. Fear of debt is not widespread; Interest and repayment are often not observed.
According to the OECD, the average debt of German households is 90 percent of the annual income available and 103 percent in the USA. German households largely finance expensive real estate. In America, houses are significantly cheaper; Debt are often made for consumption and training.
Living standard in comparison
The “better-life index” (“Better Life Index”) of the Organization for Economic Cooperation and Development (OECD) summarizes many aspects of private life and shows that most people live in Germany and the USA very satisfied and safely. The OECD has also developed a tape measure that measures the economic prospects of private individuals. Basically, the expectations of Hüben move like over there.
However, Americans react more violently to economic crises than Germans. Finally, optimism in America increased significantly and reached the level of Germany.
Reasons for the purchase of foreign products
Even if the current economic data still have a calming effect, the economic policy of the new American government can endanger national prosperity. The United States can get into a debt trap that opens faster than its deficit decreases in international business.
If foreign companies are hindered in America, there is a lower range of goods available for private consumption, if the offer is reduced, prices will increase. The overall offer is worse. Americans did not bought from jux and a lack of fatherland love abroad. There are regular goods that are better than locals.
