The U.S. trade turnaround is a new opportunity behind the times of great change
The arrival of a new year means that the old one has passed.
According to the latest data released by the United States, in 2023, the trade deficit of the United States has fallen to the lowest level in three years, and in addition, Mexico has also surpassed China for the first time to become the largest trading partner of the United States.
Data released by the U.S. Department of Commerce also show that in 2023, the U.S. trade deficit will be $773.4 billion, down 18.7% year-on-year, and in 2022, the U.S. trade deficit will be $951.2 billion, the highest since 1960.
Last year, the U.S. economy was reinvigorated by solid consumption, and U.S. stocks hit record highs, with analysts widely believing that under the pressure of high dollar interest rates, consumer spending will fall and imports will increase further.
This may mean a new opportunity for the mainland's trade with the United States.
Judging from the latest data, the volume of trade in goods of the United States fell significantly last year, and the decline in imports of goods was much greater than that of goods exports, while at the same time, the export of services by the United States increased significantly, and the income continued to expand.
According to the U.S. Department of Commerce, the trade deficit increased slightly in December, with a U.S. trade deficit of $62.2 billion in December, and the deficit data in the fourth quarter also played a positive role in U.S. economic growth.
The strong performance of the U.S. economy today has the potential to further promote the globalization of trade, and in a sense, this is also a new opportunity for us.
At a time when the mainland's economic troika is under pressure, the strong performance of the US economy is actually giving us export opportunities.
Today, investment and consumption are relatively weak, investment is affected by the real estate sector, last year's performance was average, as for consumption, although the performance is good, but the stamina is insufficient, and exports are an important support point to help us boost economic confidence.
Now, the main change we are facing in exports is actually the shift in US foreign trade.
According to the U.S. Department of Commerce, Mexico has surpassed China for the first time in more than two decades as the most important source of U.S. imports and the U.S. largest trading partner.
What is Friendly Shore Outsourcing?
In fact, as Yellen herself said, in the future, the United States will hand over orders to those allies whose values are the same as those of the United States, or economies that are geographically close, and friendly shore outsourcing and nearshoring will work together, which has led to a shift in US exports.
Between 2022 and 2023, U.S. imports from Mexico increased by 5% to $475 billion, while U.S. imports from China fell 20% to $427 billion over the same time period, and the last time Mexico's exports to the U.S. surpassed China's exports to the U.S. was more than two decades ago.
The bigger variable of this historic change is that the 20% drop in US imports from the mainland has given Mexico an opportunity, and it is foreseeable that this trend will continue in the near future, and if we do not respond, foreign trade will be under greater pressure in the future.
This is also an indisputable fact.
The U.S.-China trade relationship has deteriorated since the Trump era, with Trump insisting on imposing punitive tariffs on Chinese imports in 2018, a path that remained in place until Biden took office.
And this year is a key year for the U.S. election, Trump himself said that if he takes office, there will be an additional 60% tariff, and if Trump really takes office, 60% of the tariffs will be high, which will face a more difficult situation for the mainland's foreign trade exports.
Of course, more about the changes in trade can be traced back to the coronavirus.
After the supply chain was disrupted due to the new crown, the United States realized the importance of establishing supply chains in neighboring countries, so it launched nearshoring, and in the Yellen era, on this basis, the concept of friendly shoring was further proposed.
The introduction of these two concepts has created greater uncertainty in the trade landscape.
The U.S. is trying to reduce its dependence on mainland supply chains, so this gives Mexico an opportunity, after the signing of the U.S.-Canada-Mexico Free Trade Agreement three years ago, more and more companies began to open factories in Mexico to avoid high tariffs, including not only American companies such as Tesla announced to build factories in Mexico, but also many upstream and downstream supply chain companies on the mainland announced to build factories in Mexico.
The purpose behind it is very clear, and that is to avoid high tariffs.
For the mainland's export trade, there are essentially not many options left.
Either we should improve our relations with the United States and gain more share of our exports, or we should seek to replace the role of the United States and find more importers to gradually replace the United States in mainland exports.
These two steps together are obviously more beneficial for us.
However, the fact before us is that, objectively speaking, the United States is still the world's largest consumer and the largest trade deficit country, and doing business with the United States is more beneficial to us from the perspective of the trade deficit.
The United States has a per capita GDP of more than $70,000 and a population of more than 300 million, so the consumption power of the United States is obvious to all, both in terms of the total economic size and the individual per capita GDP.
Doing trade with the United States is actually doing business with the United States.
Therefore, it is unrealistic and unrealistic to find an economy with a per capita GDP of more than $70,000 and a population of more than 300 million to replace the role we play in the United States in the short term.
More importantly, at present, not only the United States, but the whole of Europe and the United States are turning, and the changes in trade have been well reflected in the data, last year my trade with the United States fell by 20%, and the trade between China and Germany is also declining, by 2025, the United States will replace the mainland and become Germany's largest trading partner.
These changes make us have to be vigilant.
The importance of the European and American markets, in fact, is that they have strong consumption power and high per capita GDP, so generally speaking, they are the consumption status of the entire global supply chain, which is an important reason why we have to mention the European and American markets.
Because there are the most developed economies, the per capita consumption power is the strongest, not only from meat, clothing or other food, but also tourism, bulk commodities, automobiles, etc., the European and American markets have strong consumption power, are all fat meat that we can not ignore.
Now, this piece of fat has begun to change some strategies, trying to use nearshoring and friendly shoring to get rid of dependence on our supply chain, which will obviously have a big impact on the mainland's exports.
In order to prevent the continuation of this trend, it is necessary to détente relations on the one hand, and to find new alternatives on the other.
The importance of exports is self-evident, on the one hand, the number of manufacturing employment accounts for about one-fifth of the total employment in the mainland, and the number of manufacturing-related employment in the mainland is as high as 180 million.
On the other hand, in the past, we said that the internal circulation, but since last year, the mainland's consumption is still relatively weak, the decline in CPI and PPI is enough to show that the mainland's effective demand is insufficient, at this time the manufacturing industry is facing greater pressure, because of the lack of domestic demand, we need to rely on the outside world to promote the growth of exports, in order to stabilize the employment situation.
If domestic demand is insufficient, it is necessary to rely on external demand to make up for it, and the reason is actually as simple as that, but many people generally do not understand the truth that they hurt the enemy by 800 and lose 1,000 themselves.
The past few years may be the heaviest year for us at the macro level, and I think it is correct to be the necessary to maintain the importance of maintaining a low level of obscurity, and in terms of decision-making on some issues, we are actually faced with a very simple choice, whether to increase employment, to increase per capita income, or to do something else.
What we do depends on what we focus on, and many people have complained in recent years that money is getting harder and harder, and jobs are getting more and more rolly, but few people think, why is this happening?
Ten years ago, no one said this, and no one complained about involution, but why is this happening now?
A relatively simple explanation is that the growth bottleneck, the speed of the cake is becoming more and more limited, and people's expectations for the future remain unchanged at this time, and the two conflict, so there is a general feeling of involution and hard to make money.
The growth is limited, we need to expand the market, stimulate the potential of the market, but this step is really done, we can actually do it infinitely.
For example, gasoline, cigarettes, etc., once these things are released, the market vitality stimulated is believed to be infinite.
And the exit is just one of the sides.
end.
Author: Luo sir, the workplace reference of the new youth. Concerned about the logic behind the development of things, optimistic pessimists. Follow me and grind the knowledge to you.