For quite a few years, U.S. economic growth has been the dominant factor in the world economy. Consequently, U.S. demand for imports has had a vital influence on the economic fortunes of many nations around the globe. With growing concerns about a U.S. economic slowdown, we wonder: How much of Europe’s GDP is accounted for by its U.S.-bound exports?
A. 25% is not correct.
Europe's dependence on exports to the United States does not reach 25% of GDP. That, however, is the level reached by both Canada and Mexico, the two North American neighbors of the United States and partners in NAFTA, the North American Free Trade Agreement.
Accordingly, these two countries stand to lose the most if the U.S. economy does indeed slow down significantly — just as they have benefited greatly in recent years from strong U.S. economic growth.
B. 10% is not correct.
The Asian "tigers" — countries such as South Korea, Taiwan, Singapore, Thailand, Malaysia, the Philippines and Indonesia — depended on exports to the United States for 10.3% of their combined GDP during the 2001-2005 period, according to IMF estimates.
C. 6% is not correct.
For all the headlines about China's massive exports to the United States, its U.S.-bound exports amounted to only 5.9% of GDP. That is 40% below the figures for most of the smaller Asian export economies. Still, twenty years ago, China exported only 0.8% of its GDP to the United States — about one-seventh the share accounted for by U.S.-bound exports today.
Coincidentally, at 5.9% of GDP, sub-Saharan Africa has the same level of export dependence on the U.S. economy as China.
D. 2.4% is correct.
The 13 countries sharing the euro as a common currency — anchored around Germany, France and the Benelux countries (but excluding the United Kingdom) — depend on exports to the United States for 2.4% of their combined GDP.
That is very close to Japan's level, which stands at 2.9% of GDP — down a third from the 4.0% level reached in the early 1980s.