The U.S. Trade Deficit
Trade was the lifeblood of the earliest states in history. Any permanent settlement requires it to some extent. The Sumerians, Akkadians, and the Egyptians relied on it heavily to sustain their populations. It’s how states were able to exist. It’s how the United States was able to create a unipolar order.
Now look at us:
Or if you’re more of a big picture kind of person (with the first chart being the balance of trade over time to the current year and the second chart being the trade balance to gdp only up to 2018):
The importance of this change cannot be overstated. Trade is an essential. Too many people mistake its importance because it’s not as shiny as some of the other economic factors like your house price or the price of gas.
But trade impacts all of those and more. Much more severely. It is the lifeblood of our civilizations just the same as it was to the first. Britain, during its height as a world empire, went to war numerous times just to have the opportunity to trade or to secure trade routes. That is the importance of trade.
I recommend a brief review of the following three articles to recognize the overall issue. Just look for the charts if you’re pressed for time:
- A Race To The Bottom: China Vs The United States
- The $94 Trillion World Economy
- Trade: The Global Transition 1960-2020
This is yet another nuclear blast to a proper trade position for a leading state. We are entering a very weak worldwide position. Hedge accordingly.
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