alt Hacker NewsThe US as a large-scale import nation and so does not need the rest of the world (except perhaps Europe, and only small parts) to keep its markets open to the US.
Even in the European case, Europe would lose much more than the US would if they closed their markets. Plus, a lot of Europe is either very close to breaking point and unwilling to change (Italy), or rapidly worsening into a crash, and unwilling to change (France).
It's Europe that is dependent on a large trade surplus with the rest of the world, financed by dollar loans to 3rd world countries. Now China is taking away their trade surplus, even directly (meaning Europe has a massive trade deficit to China), and indirectly (replacing demand for European goods, famously cars, everywhere). This is causing large-scale job losses in Europe as well as total disaster for government finances across the block, finances that were unhealthy to begin with.
Now Europe and China are unwilling to lend to the rest of the world (because initially that would make very rich Europeans/the CCP a little bit poorer, by raising inflation quite a bit, thereby raising interest rates, which will move government finances from disaster to catastrophe), so if these money flows are to keep going, either the US MUST export to China, which is not happening, or EU and/or China must loan several times their own GDP to the third world, or the EU and/or China must massively increase their dollar holdings (which will, of course, inflate the Euro and Renminbi something awful whichever way it goes). But either WILL happen, because a crash will do that too. Which is what people mean when they say the worldwide system is on a crash course.
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Europe generates ~20% of revenue for US big tech which is a large part of its stock market. With how precariously coupled US growth is to these companies, it absolutely needs that market.
I think this is a bit too deterministic. Even if Europe is in a weak position economically, "the US does not need the rest of the world" seems overstated
European economy would implode without trading with US. The biggest economy in Europe, Germany; exports cars, pharmaceuticals and other high end machinery to US and the whole middle class in Germany relies on the jobs from those exports oriented companies
Ah yes, the classic “Europe is in decline” narrative favored by Americans. You’d think after more than a decade of that nonsense, people would start to ignore it or at least question its assumptions. Nominal GDP and venture capital funding are not the only things that matter in an economy.
America has to be careful not to push Europe into the direction of China though. And with how Trump acts that might happen sooner than they would like. Bullying like how Trump prefers to do only works until some point. Europe mostly seems to bet on America changing its tune again once Trump is gone but we have to wait and see if the rot in America hasnt set in too deep already.
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What the Clown currently does is to push Europe massivly into exactly this.
I can't find it right now but I read news just a few month ago that the EU is working on making it easier to invest into EU similiar to how the Petrodollar currently works.
But if the deindustrialization of germany/EU continues as it currently does and US implodes and China has also issues, we will see how the new world order will look like.
China is for sure more resiliant though. The living standards were never as high as what we as germans are used to and they dont demonstrate.
In the USA people have guns and civil issues and a hard divide between city and country sides.
But as Europe/Germany we should be able to increase our bonds right? Investing into solar/energy transformation; Doesn't matter short term how this will end.
And if AI continues as it does with robotics, we might even see in 50-100 years a complete change in system?
USA Bonds are exploding so they might have overplayed their hand already.
I don't think whether a country is an importer or an exporter matters at this point. This is likely going to develop into a matter of national security. Nations cannot allow most of their domestic industries to be destroyed.
If the US doesn't reverse course soon, I think we'll start seeing large-scale closure of international markets to US companies very soon. Even with US retaliation, there is no other option.