About 17% of global exports are destined for the United States. The importance of the US as an export market has increased since 2008, but is lower than at the turn of the century when the US accounted for over 21% of global export value. At a country level the importance of the US as a trading partner varies significantly, with Canada, Mexico, and parts of Latin America and Caribbean being highly dependent and the rest of the world less so. This is one key aspect in understanding the potential impact of tariffs on overall exports on both large and small economies around the world. This article focuses on two aspects – dependency on trade overall as well as specific dependence on the US as an export market.
The Importance of Trade
The higher a country’s trade intensity, the bigger the impact of any impact of a change in trade volumes. Trade intensity – defined as the value of trade as a percentage of Gross Domestic Product (GDP) – increased from about 28% in the early 1990s to a peak of 51% in 2008. Since then, this figure has been volatile and has generally ranged between 41% and 49%. This is consistent with long term terms of a slowdown of trade within global value chains since 2010 (see our article on the topic from late last year). He chart below provides an overview of trade intensity for the top 30 economies in 2023. The lower the figure, the greater the importance of the domestic economy.
The US and China today have large domestic economies and are less dependent on trade as a generator of economic activity than the EU and a many smaller economies such the UAE, Singapore, Vietnam or Thailand. China’s trade intensity has ungone fundamental changes in the past 40 years – between 1980 and 2006 much of the country’s growth was driven by manufacturing and exports, but since then domestic demand has taken over as the main driver of increased economic activity. As such, China today will be less impacted by a slowdown in trade (with the US) than would have been the case 10-15 years ago.
Dependence on the US
Some of our previous analysis focused on the reliance of various US industries on imports. The charts below describe the extent to which countries rely on the US as a destination of exports.
Overall, around 17% of global exports are destined for the US. Between 2008 and 2015 the importance of the US as an export market increased but has stayed fairly constant since then. Today the EU sends about 8.5% of its exports to the US, while China sends about 15%. The US has declined in importance as a direct destination for its exports – the share of Chinese exports going to the US peaked in the early 2000s at around 22%. Countries such as South Korea, Taiwan, Vietnam and the UK have become more dependent on the US.
The following figures provide an alternative view of the level of reliance on the US. Particularly economies in North and Central America, the Caribbean are highly dependent on exports to the US. China appears less dependent than other North and Southeast Asian economies.
