NCPA - National Center for Policy Analysis

Who Loses When The U.S. Imports Less?

May 4, 2001

The monthly U.S. trade deficit -- the gap between imports and exports -- shrank sharply in February by 19 percent -- as imports tumbled 4.4 percent after slipping for several months, and exports rose 1 percent.

This slowdown in demand is bad news for our trading partners -- many of which are struggling with faltering economies.

  • The nations most at risk are those whose exports to the U.S. weigh heavily in their domestic economies.
  • These include not only Canada and Mexico, but also many nations in East Asia that are already grappling with falling industrial output and weak domestic demand.
  • An analysis by UBS Warburg economists indicates that U.S. import growth in recent years has been largely driven by America's investment and consumption binge on high-tech goods.
  • That implies that the current information technology slump spells especially bad news for such large IT exporters as Singapore, Taiwan, South Korea, the Philippines and Malaysia.

Source: Gene Koretz, "Economic Trends: The U.S. Spreads the Pain," Business Week, May 7, 2001.


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